Revenues of $43.3 billion for the Second Quarter, a 5.6 Percent
Increase Year-Over-Year
Second Quarter GAAP Diluted EPS of $0.13 and Adjusted Diluted EPS of
$2.11
Adjusted Diluted EPS Guidance Range Raised to $6.70 to $6.90 for
Fiscal 2019
VALLEY FORGE, Pa.--(BUSINESS WIRE)--May 2, 2019--
AmerisourceBergen Corporation (NYSE:ABC) today reported that in its
fiscal year 2019 second quarter ended March 31, 2019, revenue increased
5.6 percent to $43.3 billion. On the basis of U.S. generally accepted
accounting principles (GAAP), diluted earnings per share (EPS) was $0.13
for the March quarter of fiscal 2019, compared to $1.29 in the prior
year quarter. Adjusted diluted EPS, which is a non-GAAP measure that
excludes items described below, increased 8.8% to $2.11 in the fiscal
second quarter.
The Company raised its adjusted diluted EPS guidance range for fiscal
2019 to $6.70 to $6.90, from $6.65 to $6.85 previously. The Company does
not provide forward-looking guidance on a GAAP basis, as discussed below
in Fiscal Year 2019 Expectations.
“AmerisourceBergen continues to execute and deliver strong performance
with good growth in customer volumes, double-digit Specialty
distribution growth and overall strong execution across both the
Pharmaceutical Distribution Services and Global Commercialization
Services & Animal Health groups this quarter,” said Steven H. Collis,
Chairman, President and Chief Executive Officer of AmerisourceBergen.
“As we move into the second half of the year, our fiscal 2019 outlook
remains strong,” Mr. Collis continued. “AmerisourceBergen continues to
be well positioned for long-term growth and we have the utmost
confidence that our differentiated strategy and focus on providing
innovative services and solutions for our partners will continue to
drive sustainable value for all of our stakeholders.”
Second Quarter Fiscal Year 2019 Summary Results
|
|
|
|
|
|
|
GAAP |
|
Adjusted (Non-GAAP) |
Revenue |
|
$43.3B |
|
$43.3B |
Gross Profit |
|
$1.4B |
|
$1.3B |
Operating Expenses |
|
$1,377M |
|
$702M |
Operating Income |
|
$48M |
|
$617M |
Interest Expense, Net |
|
$43M |
|
$43M |
Effective Tax Rate |
|
(49.5)% |
|
21.5% |
Net Income Attributable to ABC |
|
$27M |
|
$449M |
Diluted Earnings Per Share |
|
$0.13 |
|
$2.11 |
Diluted Shares Outstanding |
|
213M |
|
213M |
Below, AmerisourceBergen presents descriptive summaries of the Company’s
GAAP and adjusted (non-GAAP) quarterly results. In the tables that
follow, GAAP results and GAAP to non-GAAP reconciliations are presented.
For more information related to non-GAAP financial measures, including
adjustments made in the periods presented, please refer to the
Supplemental Information Regarding non-GAAP Financial Measures following
the tables.
Second Quarter GAAP Results
- Revenue: In the second quarter of fiscal
2019, revenue was $43.3 billion, up 5.6 percent compared to the same
quarter in the previous fiscal year, reflecting a 5.6 percent increase
in Pharmaceutical Distribution Services revenue and a 4.5 percent
increase in revenue within Other. Revenue growth is primarily due to
the revenue growth of our Pharmaceutical Distribution Services
segment. The increase in revenue growth of our Pharmaceutical
Distribution Services segment is primarily due to the growth of some
of its largest customers, continued strong specialty product sales,
and overall market growth.
- Gross Profit: Gross profit in the fiscal
2019 second quarter was $1.4 billion, a 13.5 percent increase compared
to the same period in the previous fiscal year. Gross profit in the
current year quarter was favorably impacted by gains from antitrust
litigation settlements and a LIFO credit, and a 4.3 percent increase
in Pharmaceutical Distribution Services' gross profit. Pharmaceutical
Distribution Services benefited from an increase in revenue, offset in
part by PharMEDium's pharmaceutical compounding operations as it
shipped fewer units due to the continued implementation of certain
remedial measures at its operational locations. Gross profit as a
percentage of revenue was 3.29 percent, an increase of 23 basis points
from the prior year quarter.
- Operating Expenses: In the second quarter
of fiscal 2019, operating expenses were $1,377.2 million, compared to
$774.3 million in the same period last fiscal year. The significant
increase in operating expenses was primarily due to the $570.0 million
impairment of PharMEDium's long-lived assets in the quarter. Operating
expenses as a percentage of revenue in the fiscal 2019 second quarter
was 3.18 percent, compared to 1.89 percent for the same period in the
previous fiscal year.
- Operating Income: In the fiscal 2019
second quarter, operating income was $47.6 million versus $481.4
million in the prior year quarter. The decrease in operating income
was primarily due to the $570.0 million impairment of PharMEDium's
long-lived assets, offset in part by an increase in gross profit.
Operating income as a percentage of revenue decreased 106 basis points
to 0.11 percent in the fiscal 2019 second quarter, compared to the
previous fiscal year's second quarter.
- Interest Expense, Net:In the
fiscal 2019 second quarter, net interest expense of $43.3 million was
down 11.0 percent versus the prior year quarter. The decrease from the
prior year quarter was primarily due to an increase in interest income.
- Effective Tax Rate: The effective tax
rate was (49.5) percent for the second quarter of fiscal 2019 and 21.9
percent in the prior year quarter. The effective tax rate in the
quarter was primarily impacted by the $570.0 million impairment of
PharMEDium's long-lived assets.
- Diluted Earnings Per Share: Diluted
earnings per share was $0.13 in the second quarter of fiscal 2019
compared to $1.29 in the previous fiscal year’s second quarter. This
significant decrease was primarily due to the PharMEDium impairment.
- Diluted Shares Outstanding: Diluted
weighted average shares outstanding for the second quarter of fiscal
2019 were 212.6 million, a 4.4 percent decline versus the prior fiscal
year second quarter, due to share repurchases, net of stock option
exercises.
Second Quarter Adjusted (non-GAAP) Results
- Revenue: No adjustments were made to the
GAAP presentation of revenue. In the second quarter of fiscal 2019,
revenue was $43.3 billion, up 5.6 percent compared to the same quarter
in the previous fiscal year, reflecting a 5.6 percent increase in
Pharmaceutical Distribution Services revenue and a 4.5 percent
increase in revenue within Other. Revenue growth is primarily due to
the revenue growth of our Pharmaceutical Distribution Services
segment. The increase in revenue growth of our Pharmaceutical
Distribution Services segment is primarily due to the growth of some
of its largest customers, continued strong specialty product sales,
and overall market growth.
- Adjusted Gross Profit: Adjusted gross
profit in the fiscal 2019 second quarter was $1.3 billion, which was
up 3.2 percent compared to the same period in the previous year,
primarily due to the increase in adjusted gross profit in
Pharmaceutical Distribution Services, which was partially offset due
to fewer units being shipped by PharMEDium due to the continued
implementation of remedial measures at its operational facilities.
Adjusted gross profit as a percentage of revenue was 3.04 percent, a
decrease of 7 basis points from the prior year quarter.
- Adjusted Operating Expenses: In the
second quarter of fiscal 2019, adjusted operating expenses were $701.6
million, an increase of 1.5 percent compared to the same period in the
last fiscal year, due to an increase in Pharmaceutical Distribution
Services segment's expenses, which was partially offset by a decrease
in operating expenses in Other. Adjusted operating expenses as a
percentage of revenue in the fiscal 2019 second quarter was 1.62
percent, compared to 1.69 percent for the same period in the previous
fiscal year.
- Adjusted Operating Income: In the fiscal
2019 second quarter, adjusted operating income of $616.7 million
increased 5.2 percent from the prior year period due to an increase in
operating income within Pharmaceutical Distribution Services which
included a favorable impact from Brazil, offset in part by the fewer
units being shipped by PharMEDium. Adjusted operating income as a
percentage of revenue decreased 1 basis point to 1.42 percent in the
fiscal 2019 second quarter compared to the previous fiscal year’s
second quarter.
- Interest Expense, Net:No
adjustments were made to the GAAP presentation of net interest expense.In the fiscal 2019 second quarter, net interest expense of $43.3
million was down 11.0 percent versus the prior year quarter, primarily
due to an increase in interest income.
- Adjusted Effective Tax Rate: The adjusted
effective tax rate was 21.5 percent for the second quarter of fiscal
2019 and was 20.7 percent in the previous fiscal year’s second quarter.
- Adjusted Diluted Earnings Per Share:
Adjusted diluted earnings per share was up 8.8 percent to $2.11 in the
second quarter of fiscal 2019 compared to $1.94 in the previous fiscal
year’s second quarter, driven by the increase in adjusted operating
income and a lower share count.
- Diluted Shares Outstanding: No
adjustments were made to the GAAP presentation of diluted shares
outstanding. Diluted weighted average shares outstanding for the
second quarter of fiscal 2019 were 212.6 million, a 4.4 percent
decline versus the prior fiscal year second quarter, due to share
repurchases, net of stock option exercises.
Segment Discussion
The Company's operations are comprised of the Pharmaceutical
Distribution Services reportable segment and other operating segments
that are not significant enough to require separate reportable segment
disclosure and, therefore, have been included in Other for the purpose
of reportable segment presentation. Other consists of operating segments
that focus on global commercialization services and animal health and
includes AmerisourceBergen Consulting Services (ABCS), World Courier
and MWI Animal Health (MWI).
Pharmaceutical Distribution Services Segment
Pharmaceutical Distribution Services revenue was $41.7 billion, an
increase of 5.6 percent compared to the same quarter in the prior fiscal
year primarily due to the growth of some of its largest customers,
continued strong specialty product sales, and overall market growth.
Segment operating income of $517.0 million in the second quarter of
fiscal 2019 was up 5.7 percent compared to the same period in the
previous fiscal year, primarily due to the increase in gross profit,
offset in part by an increase in operating expenses.
Other
Revenue in Other was $1.7 billion in the second quarter of fiscal 2019,
an increase of 4.5 percent compared to the same period in the prior
fiscal year, primarily due to ABCS's growth in its Canadian operations
and growth at World Courier and MWI. Operating income in Other increased
2.9 percent to $99.9 million in the second quarter of fiscal 2019. This
increase was primarily driven by increases in operating income at ABCS's
Canadian operations and World Courier.
Recent Company Highlights & Milestones
- The Healthcare Distribution Alliance honored AmerisourceBergen with
the Distribution Management Award for its work on the upcoming Drug
Supply Chain Security Act (DSCSA) serialization requirements on
verifying serialized pharmaceutical products.
- AmerisourceBergen received a perfect score of 100 on the 2019
Corporate Equality Index, the nation’s premier benchmarking survey and
report on corporate policies and practices related to LGBTQ workplace
equality, administered by the Human Rights Campaign Foundation.
- AmerisourceBergen opened its newest office located in Carrollton,
Texas, and reinforced its commitment to attract and retain unmatched
talent in the Texas community. As a part of AmerisourceBergen’s
efforts to promote sustainability and employee wellbeing, the new
300,000 sq. ft. facility is actively pursuing a Leadership in Energy
and Environmental Design (LEED) Silver certification.
- Lash Group, AmerisourceBergen's patient support services business, and
AllazoHealth, an artificial intelligence and predictive analytics
company focused on ensuring optimal patient outcomes, announced a
partnership that will enhance patient adherence and engagement
programs through targeted and personalized recommendations that will
empower at-risk patients to ultimately make healthier choices.
- The AmerisourceBergen Foundation, through its Opioid Resource Grant
Program, awarded more than 30 organizations demonstrating community
leadership with grants to provide critically needed youth, provider
and community education around preventing and addressing prescription
medication misuse.
- The AmerisourceBergen Foundation announced a $150,000 donation to
Southeastern Guide Dogs, a nonprofit focused on transforming lives by
creating and nurturing extraordinary partnerships between people and
dogs. With the support of this multi-year grant, Southeastern Guide
Dogs will be able to increase placements of guide and companion dogs
with visually impaired teenagers and children, as well as families of
fallen service members and with child advocate professionals in
courtrooms.
- AmerisourceBergen was named a Philly.com Top Workplace for the
7th year in a row.
Fiscal Year 2019 Expectations
The Company does not provide forward-looking guidance on a GAAP basis as
certain financial information, the probable significance of which cannot
be determined, is not available and cannot be reasonably estimated.
Please refer to the Supplemental Information Regarding Non-GAAP
Financial Measures following the tables for additional information.
Fiscal Year 2019 Expectations on an Adjusted
(non-GAAP) Basis
AmerisourceBergen has updated its fiscal year 2019 financial guidance to
reflect the Company’s continued solid execution and greater than
anticipated number of share repurchases. The company now expects:
-
Adjusted Diluted EPS range raised to $6.70 to $6.90, up from the
previous range of $6.65 to $6.85.
Additional expectations now include:
-
Weighted average diluted shares are now expected to be approximately
214 million, down from the previous expectation of approximately 215
million.
All other previously communicated aspects of the Company's fiscal year
2019 financial guidance and assumptions remain the same.
Conference Call & Slide Presentation
The Company will host a conference call to discuss the results at 8:30
a.m. ET on May 2, 2019. A slide presentation for investors has also been
posted on the Company's website at investor.amerisourcebergen.com.
Participating in the conference call will be:
- Steven H. Collis, Chairman, President & Chief Executive Officer
- James F. Cleary, Executive Vice President & Chief Financial Officer
The dial-in number for the live call will be (612) 326-1019. No access
code is required. The live call will also be webcast via the Company’s
website at investor.amerisourcebergen.com.
Users are encouraged to log on to the webcast approximately 10 minutes
in advance of the scheduled start time of the call.
Replays of the call will be made available via telephone and webcast. A
replay of the webcast will be posted on investor.amerisourcebergen.com
approximately two hours after the completion of the call and will remain
available for 30 days. The telephone replay will also be available
approximately two hours after the completion of the call and will remain
available for seven days. To access the telephone replay from within the
U.S., dial (800) 475-6701. From outside the U.S., dial (320) 365-3844.
The access code for the replay is 465792.
Upcoming Investor Events
AmerisourceBergen management will be attending the following investor
conference in the coming months:
- Goldman Sachs 40th Annual Global Healthcare Conference, June 11-13,
Rancho Palos Verdes, CA.
Please check the website for updates regarding the timing of the live
presentation webcasts, if any, and for replay information.
About AmerisourceBergen
AmerisourceBergen provides pharmaceutical products, value-driving
services and business solutions that improve access to care. Tens of
thousands of healthcare providers, veterinary practices and livestock
producers trust us as their partner in the pharmaceutical supply chain.
Global manufacturers depend on us for services that drive commercial
success for their products. Through our daily work—and powered by our
21,000 associates—we are united in our responsibility to create
healthier futures. AmerisourceBergen is ranked #12 on the Fortune 500,
with more than $160 billion in annual revenue. The company is
headquartered in Valley Forge, Pa. and has a presence in 50+ countries.
Learn more at investor.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," "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 changes 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: unfavorable trends
in brand and generic pharmaceutical pricing, including in rate or
frequency of price inflation or deflation; competition and 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; changes in the United States
healthcare and regulatory environment, including changes that could
impact prescription drug reimbursement under Medicare and Medicaid;
increasing governmental regulations regarding the pharmaceutical supply
channel and pharmaceutical compounding; declining reimbursement rates
for pharmaceuticals; federal and state government enforcement
initiatives to detect and prevent suspicious orders of controlled
substances and the diversion of controlled substances; increased public
concern over the abuse of opioid medications; prosecution or suit by
federal, state and other governmental entities of alleged violations of
laws and regulations regarding controlled substances, and any related
disputes, including shareholder derivative lawsuits; increased federal
scrutiny and litigation, including qui tam litigation, for alleged
violations of laws and regulations governing the marketing, sale,
purchase and/or dispensing of pharmaceutical products or services, and
associated reserves and costs; material adverse resolution of pending
legal proceedings; 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; changes to
customer or supplier payment terms; risks associated with the strategic,
long-term relationship between Walgreens Boots Alliance, Inc. and the
Company, including principally with respect to the pharmaceutical
distribution agreement and/or the global generic purchasing services
arrangement; changes in tax laws or legislative initiatives that could
adversely affect the Company's tax positions and/or the Company's tax
liabilities or adverse resolution of challenges to the Company's tax
positions; regulatory or enforcement action, including a consent decree,
in connection with the production, labeling or packaging of products
compounded by our compounded sterile preparations (CSP) business;
suspension of production of CSPs, including continued suspension at our
Memphis facility; managing foreign expansion, including non-compliance
with the U.S. Foreign Corrupt Practices Act, anti-bribery laws, economic
sanctions and import laws and regulations; 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; malfunction, failure or breach of
sophisticated information systems to operate as designed; risks
generally associated with data privacy regulation and the international
transfer of personal data; natural disasters or other unexpected events
that affect the Company’s operations; the impairment of goodwill or
other intangible assets (including any additional impairments with
respect to foreign operations or PharMEDium), resulting in a charge to
earnings; the acquisition of businesses that do not perform as expected,
or that are difficult to integrate or control, including the integration
of H. D. Smith and PharMEDium, or the inability to capture all of the
anticipated synergies related thereto or to capture the anticipated
synergies within the expected time period; the fact the acquisition of
H. D. Smith may make it more difficult to establish or maintain
relationships with employees, suppliers, customers and other business
partners; the Company's ability to manage and complete divestitures; the
disruption of the Company's cash flow and ability to return value to its
stockholders in accordance with its past practices; interest rate and
foreign currency exchange rate fluctuations; declining economic
conditions in the United States and abroad; and other economic,
business, competitive, legal, tax, regulatory and/or operational factors
affecting the Company'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), in the Company’s Annual Report
on Form 10-K for the fiscal year ended September 30, 2018 and elsewhere
in that report and (ii) in other reports filed by the Company pursuant
to the Securities Exchange Act.
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2019
|
|
% of Revenue
|
|
Three Months Ended
March 31, 2018
|
|
% of Revenue
|
|
% Change
|
Revenue
|
|
$
|
43,319,602
|
|
|
|
|
$
|
41,033,858
|
|
|
|
|
5.6%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
41,894,846
|
|
|
|
|
39,778,175
|
|
|
|
|
5.3%
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit 1 |
|
1,424,756
|
|
|
3.29%
|
|
1,255,683
|
|
|
3.06%
|
|
13.5%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling, and administrative
|
|
628,036
|
|
|
1.45%
|
|
617,426
|
|
|
1.50%
|
|
1.7%
|
Depreciation and amortization
|
|
123,766
|
|
|
0.29%
|
|
119,388
|
|
|
0.29%
|
|
3.7%
|
Employee severance, litigation, and other 2 |
|
55,389
|
|
|
|
|
37,449
|
|
|
|
|
|
Impairment of long-lived assets 3 |
|
570,000
|
|
|
|
|
—
|
|
|
|
|
|
Total operating expenses
|
|
1,377,191
|
|
|
3.18%
|
|
774,263
|
|
|
1.89%
|
|
77.9%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
47,565
|
|
|
0.11%
|
|
481,420
|
|
|
1.17%
|
|
(90.1)%
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) loss 4 |
|
(14,494
|
)
|
|
|
|
29,123
|
|
|
|
|
|
Interest expense, net
|
|
43,275
|
|
|
|
|
48,637
|
|
|
|
|
(11.0)%
|
Loss on consolidation of equity investments
|
|
—
|
|
|
|
|
42,328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
18,784
|
|
|
0.04%
|
|
361,332
|
|
|
0.88%
|
|
(94.8)%
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) expense
|
|
(9,289
|
)
|
|
|
|
79,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
28,073
|
|
|
0.06%
|
|
282,160
|
|
|
0.69%
|
|
(90.1)%
|
|
|
|
|
|
|
|
|
|
|
|
Net (income) loss attributable to noncontrolling interest
|
|
(938
|
)
|
|
|
|
5,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to AmerisourceBergen Corporation
|
|
$
|
27,135
|
|
|
0.06%
|
|
$
|
287,455
|
|
|
0.70%
|
|
(90.6)%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.13
|
|
|
|
|
$
|
1.31
|
|
|
|
|
(90.1)%
|
Diluted
|
|
$
|
0.13
|
|
|
|
|
$
|
1.29
|
|
|
|
|
(89.9)%
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
210,934
|
|
|
|
|
219,200
|
|
|
|
|
(3.8)%
|
Diluted
|
|
212,563
|
|
|
|
|
222,303
|
|
|
|
|
(4.4)%
|
________________________________________
|
|
1 |
|
Includes a $66.8 million LIFO credit, a $52.0 million gain from
antitrust litigation settlements, and $12.3 million of PharMEDium
remediation costs in the three months ended March 31, 2019. Includes
$22.5 million of PharMEDium remediation costs and a $0.3 million
gain from antitrust litigation settlements in the three months ended
March 31, 2018.
|
|
2 |
|
Includes $14.0 million of employee severance, $13.8 million of
litigation costs primarily related to opioid lawsuits and
investigations, and $27.5 million of other costs in connection with
acquisition-related deal and integration costs, business
transformation efforts, and other restructuring initiatives in the
three months ended March 31, 2019. Includes $20.8 million of
employee severance, $7.6 million of litigation costs primarily
related to opioid lawsuits and investigations, and $9.0 million of
other costs in connection with acquisition-related deal and
integration costs, business transformation efforts, and other
restructuring initiatives in the three months ended March 31, 2018.
|
|
3 |
|
Impairment of finite-lived intangible assets and property and
equipment relating to PharMEDium.
|
|
4 |
|
Includes a $13.7 million gain on the sale of an equity investment in
the three months ended March 31, 2019. Includes a $30.0 million
impairment on a non-customer note receivable in the three months
ended March 31, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
March 31, 2019
|
|
% of Revenue
|
|
Six Months Ended
March 31, 2018
|
|
% of Revenue
|
|
% Change
|
Revenue
|
|
$
|
88,712,054
|
|
|
|
|
$
|
81,500,190
|
|
|
|
|
8.8%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
85,989,718
|
|
|
|
|
79,131,855
|
|
|
|
|
8.7%
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit 1 |
|
2,722,336
|
|
|
3.07%
|
|
2,368,335
|
|
|
2.91%
|
|
14.9%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling, and administrative
|
|
1,284,621
|
|
|
1.45%
|
|
1,175,948
|
|
|
1.44%
|
|
9.2%
|
Depreciation and amortization
|
|
246,266
|
|
|
0.28%
|
|
224,524
|
|
|
0.28%
|
|
9.7%
|
Employee severance, litigation, and other 2 |
|
96,061
|
|
|
|
|
67,470
|
|
|
|
|
|
Impairment of long-lived assets 3 |
|
570,000
|
|
|
|
|
—
|
|
|
|
|
|
Total operating expenses
|
|
2,196,948
|
|
|
2.48%
|
|
1,467,942
|
|
|
1.80%
|
|
49.7%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
525,388
|
|
|
0.59%
|
|
900,393
|
|
|
1.10%
|
|
(41.6)%
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) loss 4 |
|
(11,397
|
)
|
|
|
|
29,447
|
|
|
|
|
|
Interest expense, net
|
|
85,445
|
|
|
|
|
84,501
|
|
|
|
|
1.1%
|
Loss on consolidation of equity investments
|
|
—
|
|
|
|
|
42,328
|
|
|
|
|
|
Loss on early retirement of debt
|
|
—
|
|
|
|
|
23,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
451,340
|
|
|
0.51%
|
|
720,351
|
|
|
0.88%
|
|
(37.3)%
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit)
|
|
31,514
|
|
|
|
|
(423,662
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
419,826
|
|
|
0.47%
|
|
1,144,013
|
|
|
1.40%
|
|
(63.3)%
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interest
|
|
961
|
|
|
|
|
5,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to AmerisourceBergen Corporation
|
|
$
|
420,787
|
|
|
0.47%
|
|
$
|
1,149,308
|
|
|
1.41%
|
|
(63.4)%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.99
|
|
|
|
|
$
|
5.25
|
|
|
|
|
(62.1)%
|
Diluted
|
|
$
|
1.97
|
|
|
|
|
$
|
5.19
|
|
|
|
|
(62.0)%
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
211,503
|
|
|
|
|
218,763
|
|
|
|
|
(3.3)%
|
Diluted
|
|
213,275
|
|
|
|
|
221,565
|
|
|
|
|
(3.7)%
|
________________________________________
|
|
1 |
|
Includes a $139.3 million gain from antitrust litigation
settlements, a $69.8 million LIFO credit, $30.2 million of
PharMEDium remediation costs, and a $22.0 million reversal of a
prior period assessment relating to the New York Opioid Stewardship
Act in the six months ended March 31, 2019. Includes $22.5 million
of PharMEDium remediation costs and a $0.3 million gain from
antitrust litigation settlements in the six months ended March 31,
2018.
|
|
2 |
|
Includes $18.8 million of employee severance, $28.4 million of
litigation costs primarily related to opioid lawsuits and
investigations, and $48.9 million of other costs in connection with
acquisition-related deal and integration costs, business
transformation efforts, and other restructuring initiatives in the
six months ended March 31, 2019. Includes $28.4 million of employee
severance, $10.4 million of litigation costs primarily related to
opioid lawsuits, investigations, and initiatives, and $28.6 million
of other costs in connection with acquisition-related deal and
integration costs, business transformation efforts, and other
restructuring initiatives in the six months ended March 31, 2018.
|
|
3 |
|
Impairment of finite-lived intangible assets and property and
equipment relating to PharMEDium.
|
|
4 |
|
Includes a $13.7 million gain on the sale of an equity investment in
the six months ended March 31, 2019. Includes a $30.0 million
impairment on a non-customer note receivable in the six months ended
March 31, 2018.
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
GAAP TO NON-GAAP RECONCILIATIONS
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2019 |
|
|
|
Gross Profit |
|
Operating Expenses |
|
|
Operating Income |
|
Income Before Income Taxes |
|
Income Tax (Benefit) Expense
|
|
Net Income Attributable to Noncontrolling Interest
|
|
Net Income Attributable to ABC
|
|
Diluted Earnings Per Share
|
|
GAAP
|
|
$
|
1,424,756
|
|
|
$
|
1,377,191
|
|
|
$
|
47,565
|
|
|
$
|
18,784
|
|
|
$
|
(9,289
|
)
|
|
$
|
(938
|
)
|
|
$
|
27,135
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
(51,976
|
)
|
|
—
|
|
|
(51,976
|
)
|
|
(51,976
|
)
|
|
(16,980
|
)
|
|
—
|
|
|
(34,996
|
)
|
|
(0.16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO credit
|
|
(66,805
|
)
|
|
—
|
|
|
(66,805
|
)
|
|
(66,805
|
)
|
|
(17,137
|
)
|
|
—
|
|
|
(49,668
|
)
|
|
(0.23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PharMEDium remediation costs
|
|
12,334
|
|
|
(3,563
|
)
|
|
15,897
|
|
|
15,897
|
|
|
4,927
|
|
|
—
|
|
|
10,970
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York State Opioid Stewardship Act
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(944
|
)
|
|
—
|
|
|
944
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
—
|
|
|
(46,594
|
)
|
|
46,594
|
|
|
46,594
|
|
|
13,800
|
|
|
(437
|
)
|
|
32,357
|
|
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee severance, litigation, and other
|
|
—
|
|
|
(55,389
|
)
|
|
55,389
|
|
|
55,389
|
|
|
7,474
|
|
|
—
|
|
|
47,915
|
|
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of long-lived assets
|
|
—
|
|
|
(570,000
|
)
|
|
570,000
|
|
|
570,000
|
|
|
145,103
|
|
|
—
|
|
|
424,897
|
|
|
2.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of an equity investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,692
|
)
|
|
(3,485
|
)
|
|
—
|
|
|
(10,207
|
)
|
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
|
|
$
|
1,318,309
|
|
|
$
|
701,645
|
|
|
$
|
616,664
|
|
|
$
|
574,191
|
|
|
$
|
123,469
|
|
|
$
|
(1,375
|
)
|
|
$
|
449,347
|
|
|
$
|
2.11
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP % change vs. prior year period
|
|
3.2
|
%
|
|
1.5
|
%
|
|
5.2
|
%
|
|
6.6
|
%
|
|
10.9
|
%
|
|
|
|
4.0
|
%
|
|
8.8
|
%
|
|
Percentages of Revenue:
|
|
GAAP |
|
|
Adjusted Non-GAAP
|
|
|
Gross profit
|
|
3.29%
|
|
|
3.04%
|
|
|
Operating expenses
|
|
3.18%
|
|
|
1.62%
|
|
|
Operating income
|
|
0.11%
|
|
|
1.42%
|
|
|
1 |
|
The sum of the components does not equal the total due to rounding.
|
|
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
GAAP TO NON-GAAP RECONCILIATIONS
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
Three Months Ended March 31, 2018 |
|
|
Gross Profit |
|
Operating Expenses
|
|
Operating Income
|
|
Income Before Income Taxes
|
|
Income Tax Expense
|
|
Net Loss Attributable to Noncontrolling Interest
|
|
Net Income Attributable to ABC
|
|
Diluted Earnings Per Share
|
GAAP
|
|
$
|
1,255,683
|
|
|
$
|
774,263
|
|
|
$
|
481,420
|
|
|
$
|
361,332
|
|
|
$
|
79,172
|
|
|
$
|
5,295
|
|
|
$
|
287,455
|
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
(338
|
)
|
|
—
|
|
|
(338
|
)
|
|
(338
|
)
|
|
(97
|
)
|
|
—
|
|
|
(241
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PharMEDium remediation costs
|
|
22,506
|
|
|
—
|
|
|
22,506
|
|
|
22,506
|
|
|
6,478
|
|
|
—
|
|
|
16,028
|
|
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
—
|
|
|
(45,295
|
)
|
|
45,295
|
|
|
45,325
|
|
|
13,882
|
|
|
(669
|
)
|
|
30,774
|
|
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee severance, litigation, and other
|
|
—
|
|
|
(37,449
|
)
|
|
37,449
|
|
|
37,449
|
|
|
11,420
|
|
|
—
|
|
|
26,029
|
|
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on consolidation of equity investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,328
|
|
|
—
|
|
|
—
|
|
|
42,328
|
|
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment on non-customer note receivable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on early retirement of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
507
|
|
|
—
|
|
|
(507
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
|
|
$
|
1,277,851
|
|
|
$
|
691,519
|
|
|
$
|
586,332
|
|
|
$
|
538,602
|
|
|
$
|
111,362
|
|
|
$
|
4,626
|
|
|
$
|
431,866
|
|
|
$
|
1.94
|
Percentages of Revenue: |
|
GAAP |
|
Adjusted Non-GAAP
|
|
Gross profit
|
|
3.06%
|
|
3.11%
|
|
Operating expenses
|
|
1.89%
|
|
1.69%
|
|
Operating income
|
|
1.17%
|
|
1.43%
|
|
________________________________________
|
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
GAAP TO NON-GAAP RECONCILIATIONS
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
Six Months Ended March 31, 2019 |
|
|
Gross Profit |
|
Operating Expenses
|
|
Operating Income |
|
Income Before Income Taxes
|
|
Income Tax Expense
|
|
Net Loss Attributable to Noncontrolling Interest
|
|
Net Income Attributable to ABC
|
|
Diluted Earnings Per Share
|
GAAP
|
|
$
|
2,722,336
|
|
|
$
|
2,196,948
|
|
|
$
|
525,388
|
|
|
$
|
451,340
|
|
|
$
|
31,514
|
|
|
$
|
961
|
|
|
$
|
420,787
|
|
|
$
|
1.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
(139,255
|
)
|
|
—
|
|
|
(139,255
|
)
|
|
(139,255
|
)
|
|
(35,450
|
)
|
|
—
|
|
|
(103,805
|
)
|
|
(0.49
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO credit
|
|
(69,834
|
)
|
|
—
|
|
|
(69,834
|
)
|
|
(69,834
|
)
|
|
(17,778
|
)
|
|
—
|
|
|
(52,056
|
)
|
|
(0.24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PharMEDium remediation costs
|
|
30,245
|
|
|
(6,147
|
)
|
|
36,392
|
|
|
36,392
|
|
|
9,264
|
|
|
—
|
|
|
27,128
|
|
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York State Opioid Stewardship Act
|
|
(22,000
|
)
|
|
—
|
|
|
(22,000
|
)
|
|
(22,000
|
)
|
|
(5,600
|
)
|
|
—
|
|
|
(16,400
|
)
|
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
—
|
|
|
(91,746
|
)
|
|
91,746
|
|
|
91,746
|
|
|
23,355
|
|
|
(943
|
)
|
|
67,448
|
|
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee severance, litigation, and other
|
|
—
|
|
|
(96,061
|
)
|
|
96,061
|
|
|
96,061
|
|
|
24,454
|
|
|
—
|
|
|
71,607
|
|
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of long-lived assets
|
|
—
|
|
|
(570,000
|
)
|
|
570,000
|
|
|
570,000
|
|
|
145,103
|
|
|
—
|
|
|
424,897
|
|
|
1.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of an equity investment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,692
|
)
|
|
(3,485
|
)
|
|
—
|
|
|
(10,207
|
)
|
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax reform 1 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,997
|
|
|
—
|
|
|
(36,997
|
)
|
|
(0.17
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
|
|
$
|
2,521,492
|
|
|
$
|
1,432,994
|
|
|
$
|
1,088,498
|
|
|
$
|
1,000,758
|
|
|
$
|
208,374
|
|
|
$
|
18
|
|
|
$
|
792,402
|
|
|
$
|
3.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP % change vs. prior year period
|
|
5.5
|
%
|
|
8.9
|
%
|
|
1.3
|
%
|
|
1.0
|
%
|
|
(5.7
|
)%
|
|
|
|
2.3
|
%
|
|
6.6
|
%
|
Percentages of Revenue: |
|
GAAP |
|
Adjusted Non-GAAP
|
|
Gross profit
|
|
3.07%
|
|
2.84%
|
|
Operating expenses
|
|
2.48%
|
|
1.62%
|
|
Operating income
|
|
0.59%
|
|
1.23%
|
|
1 |
|
Includes a measurement period adjustment to the one-time transition
tax on historical foreign earnings and profits through December 31,
2017.
|
|
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
GAAP TO NON-GAAP RECONCILIATIONS
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
Six Months Ended March 31, 2018 |
|
|
|
Gross Profit |
|
Operating Expenses |
|
Operating Income |
|
Income Before Income Taxes
|
|
Income Tax (Benefit) Expense
|
|
Net Loss Attributable to Noncontrolling Interest
|
|
Net Income Attributable to ABC
|
|
Diluted Earnings Per Share
|
|
GAAP
|
|
$
|
2,368,335
|
|
|
$
|
1,467,942
|
|
|
$
|
900,393
|
|
|
$
|
720,351
|
|
|
$
|
(423,662
|
)
|
|
$
|
5,295
|
|
|
$
|
1,149,308
|
|
|
$
|
5.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
(338
|
)
|
|
—
|
|
|
(338
|
)
|
|
(338
|
)
|
|
(97
|
)
|
|
—
|
|
|
(241
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PharMEDium remediation costs
|
|
22,506
|
|
|
—
|
|
|
22,506
|
|
|
22,506
|
|
|
6,478
|
|
|
—
|
|
|
16,028
|
|
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
—
|
|
|
(84,351
|
)
|
|
84,351
|
|
|
84,476
|
|
|
24,317
|
|
|
(669
|
)
|
|
59,490
|
|
|
0.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee severance, litigation and other
|
|
—
|
|
|
(67,470
|
)
|
|
67,470
|
|
|
67,470
|
|
|
19,421
|
|
|
—
|
|
|
48,049
|
|
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on consolidation of equity investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,328
|
|
|
—
|
|
|
—
|
|
|
42,328
|
|
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment on non-customer note receivable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on early retirement of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,766
|
|
|
6,841
|
|
|
—
|
|
|
16,925
|
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Reform 1 |
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
587,595
|
|
|
—
|
|
|
(587,595
|
)
|
|
(2.65
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
|
|
$
|
2,390,503
|
|
|
$
|
1,316,121
|
|
|
$
|
1,074,382
|
|
|
$
|
990,559
|
|
|
$
|
220,893
|
|
|
$
|
4,626
|
|
|
$
|
774,292
|
|
|
$
|
3.49
|
|
2 |
Percentages of Revenue: |
|
GAAP |
|
Adjusted Non-GAAP
|
|
Gross profit
|
|
2.91%
|
|
2.93%
|
|
Operating expenses
|
|
1.80%
|
|
1.61%
|
|
Operating income
|
|
1.10%
|
|
1.32%
|
|
________________________________________
|
|
1 |
|
Represents the impact of applying a lower U.S. federal income tax
rate to the Company's net deferred tax liabilities as of December
31, 2017, offset in part by a one-time transition tax on historical
foreign earnings and profits through December 31, 2017.
|
|
2 |
|
The sum of the components does not equal the total due to rounding.
|
|
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
AMERISOURCEBERGEN CORPORATION
SUMMARY SEGMENT INFORMATION
(dollars in thousands)
(unaudited)
|
|
|
|
|
|
Three Months Ended March 31, |
Revenue |
|
2019 |
|
2018 |
|
% Change |
Pharmaceutical Distribution Services
|
|
$
|
41,676,164
|
|
|
$
|
39,453,353
|
|
|
5.6%
|
Other
|
|
1,665,429
|
|
|
1,594,378
|
|
|
4.5%
|
Intersegment eliminations
|
|
(21,991
|
)
|
|
(13,873
|
)
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
43,319,602
|
|
|
$
|
41,033,858
|
|
|
5.6%
|
|
|
|
|
|
Three Months Ended March 31, |
Operating income |
|
2019 |
|
2018 |
|
% Change |
Pharmaceutical Distribution Services
|
|
$
|
517,034
|
|
|
$
|
489,106
|
|
|
5.7%
|
Other
|
|
99,879
|
|
|
97,055
|
|
|
2.9%
|
Intersegment eliminations
|
|
(249
|
)
|
|
171
|
|
|
|
Total segment operating income
|
|
616,664
|
|
|
586,332
|
|
|
5.2%
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
51,976
|
|
|
338
|
|
|
|
LIFO credit
|
|
66,805
|
|
|
—
|
|
|
|
PharMEDium remediation costs
|
|
(15,897
|
)
|
|
(22,506
|
)
|
|
|
Acquisition-related intangibles amortization
|
|
(46,594
|
)
|
|
(45,295
|
)
|
|
|
Employee severance, litigation, and other
|
|
(55,389
|
)
|
|
(37,449
|
)
|
|
|
Impairment of long-lived assets
|
|
(570,000
|
)
|
|
—
|
|
|
|
Operating income
|
|
$
|
47,565
|
|
|
$
|
481,420
|
|
|
|
|
|
|
|
|
|
|
Percentages of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical Distribution Services
|
|
|
|
|
|
|
Gross profit
|
|
2.38%
|
|
2.41%
|
|
|
Operating expenses
|
|
1.14%
|
|
1.17%
|
|
|
Operating income
|
|
1.24%
|
|
1.24%
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Gross profit
|
|
19.60%
|
|
20.48%
|
|
|
Operating expenses
|
|
13.60%
|
|
14.39%
|
|
|
Operating income
|
|
6.00%
|
|
6.09%
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (GAAP)
|
|
|
|
|
|
|
Gross profit
|
|
3.29%
|
|
3.06%
|
|
|
Operating expenses
|
|
3.18%
|
|
1.89%
|
|
|
Operating income
|
|
0.11%
|
|
1.17%
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (Non-GAAP)
|
|
|
|
|
|
|
Adjusted gross profit
|
|
3.04%
|
|
3.11%
|
|
|
Adjusted operating expenses
|
|
1.62%
|
|
1.69%
|
|
|
Adjusted operating income
|
|
1.42%
|
|
1.43%
|
|
|
Note: For more information related to non-GAAP financial measures, refer
to the section titled "Supplemental Information Regarding Non-GAAP
Financial Measures" of this release.
|
|
|
AMERISOURCEBERGEN CORPORATION
SUMMARY SEGMENT INFORMATION
(dollars in thousands)
(unaudited)
|
|
|
|
|
|
Six Months Ended March 31, |
Revenue |
|
2019 |
|
2018 |
|
% Change |
Pharmaceutical Distribution Services
|
|
$
|
85,420,545
|
|
|
$
|
78,391,051
|
|
|
9.0%
|
Other
|
|
3,336,367
|
|
|
3,139,329
|
|
|
6.3%
|
Intersegment eliminations
|
|
(44,858
|
)
|
|
(30,190
|
)
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
88,712,054
|
|
|
$
|
81,500,190
|
|
|
8.8%
|
|
|
Six Months Ended March 31, |
Operating income |
|
2019 |
|
2018 |
|
% Change |
Pharmaceutical Distribution Services
|
|
$
|
890,241
|
|
|
$
|
877,288
|
|
|
1.5%
|
Other
|
|
198,813
|
|
|
197,330
|
|
|
0.8%
|
Intersegment eliminations
|
|
(556
|
)
|
|
(236
|
)
|
|
|
Total segment operating income
|
|
1,088,498
|
|
|
1,074,382
|
|
|
1.3%
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
139,255
|
|
|
338
|
|
|
|
LIFO credit
|
|
69,834
|
|
|
—
|
|
|
|
PharMEDium remediation costs
|
|
(36,392
|
)
|
|
(22,506
|
)
|
|
|
New York State Opioid Stewardship Act
|
|
22,000
|
|
|
—
|
|
|
|
Acquisition-related intangibles amortization
|
|
(91,746
|
)
|
|
(84,351
|
)
|
|
|
Employee severance, litigation, and other
|
|
(96,061
|
)
|
|
(67,470
|
)
|
|
|
Impairment of long-lived assets
|
|
(570,000
|
)
|
|
—
|
|
|
|
Operating income
|
|
$
|
525,388
|
|
|
$
|
900,393
|
|
|
|
|
|
|
|
|
|
|
Percentages of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical Distribution Services
|
|
|
|
|
|
|
Gross profit
|
|
2.19%
|
|
2.22%
|
|
|
Operating expenses
|
|
1.15%
|
|
1.11%
|
|
|
Operating income
|
|
1.04%
|
|
1.12%
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Gross profit
|
|
19.53%
|
|
20.61%
|
|
|
Operating expenses
|
|
13.57%
|
|
14.32%
|
|
|
Operating income
|
|
5.96%
|
|
6.29%
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (GAAP)
|
|
|
|
|
|
|
Gross profit
|
|
3.07%
|
|
2.91%
|
|
|
Operating expenses
|
|
2.48%
|
|
1.80%
|
|
|
Operating income
|
|
0.59%
|
|
1.10%
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (Non-GAAP)
|
|
|
|
|
|
|
Adjusted gross profit
|
|
2.84%
|
|
2.93%
|
|
|
Adjusted operating expenses
|
|
1.62%
|
|
1.61%
|
|
|
Adjusted operating income
|
|
1.23%
|
|
1.32%
|
|
|
Note: For more information related to non-GAAP financial measures, refer
to the section titled "Supplemental Information Regarding Non-GAAP
Financial Measures" of this release.
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
March 31, |
|
September 30, |
|
|
2019 |
|
2018 |
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,875,750
|
|
|
$
|
2,492,516
|
Accounts receivable, net
|
|
12,222,271
|
|
|
11,314,226
|
Inventories
|
|
11,373,730
|
|
|
11,918,508
|
Right to recover asset 1 |
|
977,860
|
|
|
—
|
Prepaid expenses and other
|
|
172,572
|
|
|
169,122
|
Total current assets
|
|
27,622,183
|
|
|
25,894,372
|
|
|
|
|
|
Property and equipment, net
|
|
1,858,867
|
|
|
1,892,424
|
Goodwill and other intangible assets
|
|
9,055,678
|
|
|
9,612,100
|
Other long-term assets
|
|
273,582
|
|
|
270,942
|
|
|
|
|
|
Total assets
|
|
$
|
38,810,310
|
|
|
$
|
37,669,838
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
28,189,390
|
|
|
$
|
26,836,873
|
Other current liabilities
|
|
1,022,509
|
|
|
1,032,814
|
Total current liabilities
|
|
29,211,899
|
|
|
27,869,687
|
|
|
|
|
|
Long-term debt
|
|
4,009,500
|
|
|
4,158,532
|
|
|
|
|
|
Accrued income taxes
|
|
273,662
|
|
|
299,600
|
Deferred income taxes
|
|
1,857,201
|
|
|
1,829,410
|
Other long-term liabilities
|
|
419,717
|
|
|
462,648
|
|
|
|
|
|
Total equity
|
|
3,038,331
|
|
|
3,049,961
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
38,810,310
|
|
|
$
|
37,669,838
|
1 Right to recover assets represents the inventory value
associated with the accrual for estimated customer sales returns. The
inventories balance at September 30, 2018 includes a $988.8 million
accrual for estimated customer sales returns.
|
|
|
AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
|
|
|
|
|
|
Six Months Ended March 31, |
|
|
2019 |
|
2018 |
Operating Activities:
|
|
|
|
|
Net income
|
|
$
|
419,826
|
|
|
$
|
1,144,013
|
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities 1, 2 |
|
820,403
|
|
|
(414,709
|
)
|
Changes in operating assets and liabilities, excluding the effects
of acquisitions:
|
|
|
|
|
Accounts receivable
|
|
(880,805
|
)
|
|
(590,386
|
)
|
Inventories
|
|
(420,190
|
)
|
|
(805,164
|
)
|
Accounts payable
|
|
1,350,728
|
|
|
384,378
|
|
Other 3 |
|
(186,630
|
)
|
|
204,626
|
|
Net cash provided by (used in) operating activities
|
|
1,103,332
|
|
|
(77,242
|
)
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
Capital expenditures
|
|
(161,488
|
)
|
|
(168,816
|
)
|
Cost of acquired companies, net of cash acquired
|
|
(52,398
|
)
|
|
(777,085
|
)
|
Other
|
|
2,659
|
|
|
10,479
|
|
Net cash used in investing activities
|
|
(211,227
|
)
|
|
(935,422
|
)
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
Net (repayments) borrowings 4 |
|
(16,017
|
)
|
|
820,724
|
|
Payment of premium on early retirement of debt
|
|
—
|
|
|
(22,348
|
)
|
Purchases of common stock 5 |
|
(347,959
|
)
|
|
(60,208
|
)
|
Exercises of stock options
|
|
37,590
|
|
|
115,236
|
|
Cash dividends on common stock
|
|
(170,428
|
)
|
|
(167,533
|
)
|
Other
|
|
(12,057
|
)
|
|
(16,963
|
)
|
Net cash (used in) provided by financing activities
|
|
(508,871
|
)
|
|
668,908
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
383,234
|
|
|
(343,756
|
)
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
2,492,516
|
|
|
2,435,115
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
2,875,750
|
|
|
$
|
2,091,359
|
|
________________________________________
|
1 |
|
Adjustments include a LIFO credit of $69.8 million and an impairment
of long-lived assets of $570.0 million for the six months ended
March 31, 2019.
|
|
2 |
|
Includes a $798.4 million benefit for deferred income taxes for the
six months ended March 31, 2018, primarily as a result of applying a
lower U.S. federal income tax rate to the Company's net deferred tax
liabilities as of December 31, 2017 in connection with tax reform.
|
|
3 |
|
Includes a $262.5 million increase in income taxes payable for the
six months ended March 31, 2018, primarily as a result of a one-time
transition tax on historical foreign earnings and profits through
December 31, 2017 in connection with tax reform.
|
|
4 |
|
Net borrowings for the six months ended March 31, 2018 were
primarily used to finance the acquisition of H.D. Smith, which was
completed on January 2, 2018.
|
|
5 |
|
Purchases of common stock in the six months ended March 31, 2019
includes $24.0 million of September 2018 purchases that cash settled
in October 2018.
|
SUPPLEMENTAL INFORMATION REGARDING
NON-GAAP FINANCIAL
MEASURES
To supplement the financial measures prepared in accordance with U.S.
generally accepted accounting principles (GAAP), the Company uses the
non-GAAP financial measures described below. The non-GAAP financial
measures should be viewed in addition to, and not in lieu of, financial
measures calculated in accordance with GAAP. These supplemental measures
may vary from, and may not be comparable to, similarly titled measures
by other companies.
The non-GAAP financial measures are presented because management uses
non-GAAP financial measures to evaluate the Company’s operating
performance, to perform financial planning, and to determine incentive
compensation. Therefore, the Company believes that the presentation of
non-GAAP financial measures provides useful supplementary information
to, and facilitates additional analysis by, investors. The presented
non-GAAP financial measures exclude items that management does not
believe reflect the Company’s core operating performance because such
items are outside the control of the Company or are inherently unusual,
non-operating, unpredictable, non-recurring, or non-cash. We have
included the following non-GAAP earnings-related financial measures in
this release:
- Adjusted gross profit and adjusted gross profit margin: Adjusted
gross profit is a non-GAAP financial measure that excludes the gain
from antitrust litigation settlements, certain PharMEDium remediation
costs, LIFO expense (credit), and costs (credit) related to the New
York State Opioid Stewardship Act. Gain from antitrust litigation
settlements and LIFO expense (credit) are excluded because the Company
cannot control the amounts recognized or timing of these items.
PharMEDium remediation costs are excluded because they are
unpredictable expenses. The costs (credit) related to the New York
State Opioid Stewardship Act are excluded because they are unusual,
non-recurring and non-cash. Adjusted gross profit margin is the ratio
of adjusted gross profit to total revenue. Management believes that
these non-GAAP financial measures are useful to investors as a
supplemental measure of the Company’s ongoing operating performance.
The gain from antitrust litigation settlements relates to the
settlement of lawsuits that have been filed against brand
pharmaceutical manufacturers alleging that the manufacturer, by itself
or in concert with others, took improper actions to delay or prevent
generic drugs from entering the market. The PharMEDium remediation
costs relate to costs incurred in connection with suspended production
activities following U.S. Food and Drug Administration inspections.
LIFO expense (credit) is affected by changes in inventory quantities,
product mix, and manufacturer pricing practices, which may be impacted
by market and other external influences. The New York State Opioid
Stewardship Act, which went into effect on July 1, 2018, established
an annual $100 million fund and requires manufacturers, distributors,
and importers to ratably share the assessment based upon opioids sold
or distributed to or within New York state. In December 2018, the New
York State Opioid Stewardship Act was ruled unconstitutional by the
U.S. District for the Southern District of New York.
- Adjusted operating expenses and adjusted operating expense margin: Adjusted
operating expenses is a non-GAAP financial measure that excludes
acquisition-related intangibles amortization, employee severance,
litigation, and other, certain PharMEDium remediation costs, and
impairment of long-lived assets. Adjusted operating expense margin is
the ratio of adjusted operating expenses to total revenue.
Acquisition-related intangibles amortization is excluded because it is
a non-cash item and does not reflect the operating performance of the
acquired companies. We exclude employee severance amounts that relate
to unpredictable and/or non-recurring business restructuring. We
exclude the amount of litigation settlements and other expenses, as
well as PharMEDium remediation costs and the impairment of long-lived
assets, that are unusual, non-operating, unpredictable, non-recurring
or non-cash in nature because we believe these exclusions facilitate
the analysis of our ongoing operational performance.
- Adjusted operating income and adjusted operating income margin: Adjusted
operating income is a non-GAAP financial measure that excludes the
same items that are described above and excluded from adjusted gross
profit and adjusted operating expenses. Adjusted operating income
margin is the ratio of adjusted operating income to total revenue.
Management believes that these non-GAAP financial measures are useful
to investors as a supplemental way to evaluate the Company’s
performance because the adjustments are unusual, non-operating,
unpredictable, non-recurring or non-cash in nature.
- Adjusted income before income taxes: Adjusted income before
income taxes is a non-GAAP financial measure that excludes the same
items that are described above and excluded from adjusted operating
income. In addition, the gain on sale of an equity investment in
fiscal 2019, the loss on consolidation of equity investments in fiscal
2018, the impairment on non-customer note receivable in fiscal 2018,
and the loss on the early retirement of debt in fiscal 2018 are also
excluded from adjusted income before income taxes because these
amounts are unusual, non-operating, or non-recurring. Management
believes that this non-GAAP financial measure is useful to investors
because it facilitates the calculation of the Company’s adjusted
effective tax rate.
- Adjusted effective tax rate: Adjusted effective tax rate is a
non-GAAP financial measure that is determined by dividing adjusted
income tax expense/benefit by adjusted income before income taxes.
Management believes that this non-GAAP financial measure is useful to
investors because it presents an effective tax rate that does not
reflect unusual, non-operating, unpredictable, non-recurring, or
non-cash amounts or items that are outside the control of the Company.
- Adjusted income tax expense (benefit): Adjusted income tax
expense is a non-GAAP financial measure that excludes the income tax
expense (benefit) associated with the same items that are described
above and excluded from adjusted income before income taxes. In
addition, the one-time U.S. tax reform ("Tax Reform") adjustments are
excluded from adjusted income tax expense. Tax Reform includes a
benefit, and any measurement period adjustments, from applying a lower
U.S. federal income tax rate to the Company's net deferred tax
liabilities as of December 31, 2017, offset in part by a one-time
transition tax on historical foreign earnings and profits through
December 31, 2017. Management believes that this non-GAAP financial
measure is useful to investors as a supplemental way to evaluate the
Company’s performance because the adjustments are unusual,
non-operating, unpredictable, non-recurring or non-cash in nature.
- Adjusted net income (loss) attributable to noncontrolling interest: Adjusted
net income attributable to noncontrolling interest excludes the
non-controlling interest portion of acquisition-related intangibles
amortization. Management believes that this non-GAAP financial measure
is useful to investors because it facilitates the calculation of
adjusted net income attributable to ABC.
- Adjusted net income attributable to ABC: Adjusted net income
attributable to ABC is a non-GAAP financial measure that excludes the
same items that are described above. Management believes that this
non-GAAP financial measure is useful to investors as a supplemental
way to evaluate the Company's performance because the adjustments are
unusual, non-operating, unpredictable, non-recurring or non-cash in
nature.
- Adjusted diluted earnings per share: Adjusted diluted earnings
per share excludes the per share impact of adjustments including gain
from antitrust litigation settlements; LIFO expense (credit);
PharMEDium remediation costs; costs (credit) related to the New York
State Opioid Stewardship Act; acquisition-related intangibles
amortization; employee severance, litigation, and other; gain on sale
of an equity investment; impairment of long-lived assets; the loss on
consolidation of equity investments; the impairment on non-customer
note receivable; and the loss on early retirement of debt; in each
case net of the tax effect calculated using the applicable effective
tax rate for those items. In addition, the per share impact of Tax
Reform is excluded from adjusted diluted earnings per share.
Management believes that this non-GAAP financial measure is useful to
investors because it eliminates the per share impact of the items that
are outside the control of the Company or that we consider to not be
indicative of our ongoing operating performance due to their inherent
unusual, non-operating, unpredictable, non-recurring, or non-cash
nature.
In addition, the Company has provided non-GAAP fiscal year 2019 guidance
for diluted earnings per share, operating expense, operating income, and
effective income tax rate that excludes the same or similar items as
those that are excluded from the historical non-GAAP financial measures,
as well as significant items that are outside the control of the Company
or inherently unusual, non-operating, unpredictable, non-recurring or
non-cash in nature. In addition, it has provided fiscal year 2019
adjusted free cash flow guidance. For fiscal year 2019, we have defined
the non-GAAP financial measure of adjusted free cash flow as net cash
provided by operating activities, excluding other significant
unpredictable or non-recurring cash payments or receipts relating to
legal settlements, minus capital expenditures. The Company does not
provide forward looking guidance on a GAAP basis for such metrics
because certain financial information, the probable significance of
which cannot be determined, is not available and cannot be reasonably
estimated. For example, LIFO expense (credit) is largely dependent upon
the future inflation or deflation of brand and generic pharmaceuticals,
which is out of the Company’s control, and acquisition-related
intangibles amortization depends on the timing and amount of future
acquisitions, which cannot be reasonably estimated. Similarly, the
timing and amount of litigation settlements is unpredictable and
non-recurring.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190502005204/en/
Source: AmerisourceBergen Corporation
Bennett S. Murphy
Vice President, Investor Relations
610-727-3693
bmurphy@amerisourcebergen.com