Document

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

_________________________________


FORM 8-K
_________________________________

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 2, 2018
  _________________________________
AmerisourceBergen Corporation
(Exact name of registrant as specified in its charter)
_________________________________
Delaware
 
1-16671
 
23-3079390
(State or other jurisdiction of
 
(Commission File Number)
 
(IRS Employer
incorporation)
 
 
 
Identification No.)
 
 
 
 
 
 
 
1300 Morris Drive
 
 
 
 
Chesterbrook, PA 19087
 
 
(Address of principal executive offices, including Zip Code)

(610) 727-7000
(Registrant’s telephone number, including area code) 

Not Applicable
(Former name or former address, if changed since last report.)
_________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2of this chapter).

Emerging growth company o  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 
 

 






Item 2.02. Results of Operations and Financial Condition.
 
On May 2, 2018, AmerisourceBergen Corporation (the “Company”) issued a news release announcing the Company’s earnings for the fiscal quarter ended March 31, 2018. A copy of the news release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
 
The information in this Current Report, including the exhibit attached hereto as Exhibit 99.1 and the information under Item 7.01 below, is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. This information shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

On May 2, 2018, the Company is conducting a conference call and webcast scheduled to be held at 8:30 a.m. Eastern time regarding its results for the fiscal quarter ended March 31, 2018 and related matters.
 
A link to the conference call and slides prepared for the conference call are available under the Investors section of the Company's website at investor.amerisourcebergen.com.
  
Item 9.01. Financial Statements and Exhibits.
 
(d)  Exhibits.

Exhibit Number
 
Description of Exhibit
 
 
 
99.1
 


 
2






 SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
AMERISOURCEBERGEN CORPORATION
 
 
 
 
Date: 
May 2, 2018
By:
/s/ Tim G. Guttman
 
 
Name:
Tim G. Guttman
 
 
Title:
Executive Vice President & Chief Financial Officer
 
3



Exhibit
Exhibit 99.1
 
 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12222609&doc=3 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12222609&doc=4 
 
 
 
 
AmerisourceBergen Corporation
 
P.O. Box 959
 
Valley Forge, PA 19482
 

AMERISOURCEBERGEN REPORTS
FISCAL 2018 SECOND QUARTER RESULTS
Revenues of $41.0 Billion for the Second Quarter, a 10.5 Percent Increase Year-Over-Year
Second Quarter GAAP Diluted EPS of $1.29 and Adjusted Diluted EPS of $1.94
Adjusted Diluted EPS Guidance Maintained at $6.45 to $6.65 for Fiscal 2018; Company Expects to be at Bottom of Range
 
VALLEY FORGE, PA, May 2, 2018 - AmerisourceBergen Corporation (NYSE:ABC) today reported that in its fiscal year 2018 second quarter ended March 31, 2018, revenue increased 10.5 percent to $41.0 billion. On the basis of U.S. generally accepted accounting principles (GAAP), diluted earnings per share (EPS) was $1.29 for the March quarter of fiscal 2018, compared to $1.86 in the prior year quarter. Adjusted diluted EPS, which is a non-GAAP measure that excludes items described below, increased 9.6 percent to $1.94 in the fiscal second quarter.

AmerisourceBergen now believes adjusted diluted EPS for fiscal year 2018 will be at the bottom of its guidance range of $6.45 to $6.65, reflecting growth of 10 percent versus last fiscal year. The Company does not provide forward-looking guidance on a GAAP basis, as discussed below in Fiscal Year 2018 Expectations.

“I am pleased with our performance in the March quarter as associates and businesses within AmerisourceBergen continue to execute. Our distribution businesses are creating significant value for our customers as we grow volumes and help support their businesses in a dynamic healthcare market,” said Steven H. Collis, Chairman, President and Chief Executive Officer of AmerisourceBergen.

“Our updated outlook for fiscal 2018 reflects the strong performance of our Pharmaceutical Distribution Services segment, helping to offset a lower contribution from its PharMEDium business. We remain confident in the value, efficiency and safety PharMEDium provides the healthcare system and are committed to providing our customers with the highest quality products and services,” Mr. Collis continued. “As we move further into fiscal 2018, we are excited to begin realizing the benefits of investments throughout AmerisourceBergen that further enhance the value and efficiency we offer to our provider customers and manufacturer partners. Our long-term relationships and unique portfolio of integrated pharmaceutical services enable AmerisourceBergen to continue living its purpose as we are united in our responsibility to create healthier futures.”




 



Second Quarter Fiscal Year 2018 Summary Results

 
GAAP
Adjusted (Non-GAAP)
Revenue
$41.0B
$41.0B
Gross Profit
$1.3B
$1.3B
Operating Expenses
$774M
$692M
Operating Income
$481M
$586M
Interest Expense, Net
$49M
$49M
Tax Rate
21.9%
20.7%
Net Income Attributable to ABC
$287M
$432M
Diluted Shares Outstanding
222M
222M
Diluted Earnings Per Share
$1.29
$1.94

In conjunction with incremental investments made in the second quarter of fiscal 2018 relating to Profarma and the specialty joint venture in Brazil, AmerisourceBergen began consolidating their operating results. Below, AmerisourceBergen presents descriptive summaries of the Company’s GAAP quarterly results as well as its 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 our fiscal year 2018 expectations, 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 2018, revenue was $41.0 billion, up 10.5 percent compared to the same quarter in the previous fiscal year, reflecting a 10.4 percent increase in Pharmaceutical Distribution Services revenue and a 12.6 percent increase in revenue within Other.

Gross Profit: Gross profit in the fiscal 2018 second quarter was $1.3 billion, relatively flat compared to the same period in the previous fiscal year, due to the negative impact of PharMEDium's lower revenues and its facility remediation costs in the current year quarter and a LIFO credit that benefited the previous year period. There was no LIFO expense or credit in the fiscal 2018 second quarter. Gross profit as a percentage of revenue was 3.06 percent, a decrease of 32 basis points from the prior year quarter.

Operating Expenses: In the second quarter of fiscal 2018, operating expenses were $774.3 million, compared to $631.4 million in the same period last fiscal year. The increase in operating expenses was primarily driven by the acquisition of H. D. Smith, consolidation of Profarma and the specialty joint venture in Brazil, operating additional distribution centers in the current year quarter and duplicate costs resulting from the implementation of new information technology systems, as well as increased costs to support our revenue growth.

Operating Income: In the fiscal 2018 second quarter, operating income was $481.4 million versus $625.0 million in the prior year period.

Other Loss (Income): In the fiscal 2018 second quarter, other loss included a $30.0 million impairment on a non-customer note receivable related to a start-up venture.

Interest Expense, Net: In the fiscal 2018 second quarter, net interest expense of $48.6 million was up 30.4 percent versus the prior year quarter, primarily due to the new debt issued to finance the H. D. Smith acquisition.

Loss on Consolidation of Equity Investments: In the fiscal 2018 second quarter, a loss of $42.3 million was incurred primarily relating to the recognition of unrealized foreign currency translation losses in connection with the remeasurement of equity interests in Profarma and the specialty joint venture in Brazil.

Tax Rate: The effective tax rate of 21.9 percent for the second quarter of fiscal 2018 primarily reflects the reduction in the U.S. federal income tax rate from 35% to 21% and the benefit from stock option exercises.




Diluted Earnings Per Share: Diluted earnings per share was $1.29 in the second quarter of fiscal 2018 compared to $1.86 in the previous fiscal year’s second quarter.

Diluted Shares Outstanding: Diluted weighted average shares outstanding for the second quarter of fiscal 2018 were 222.3 million, a 0.5 percent increase versus the prior fiscal year second quarter, due primarily to stock option exercises, net of share repurchases.




Definition of Adjusted (Non-GAAP) Results

The comments below compare adjusted results, which exclude:

Gain from antitrust litigation settlements;
LIFO expense (credit);
PharMEDium remediation costs;
Acquisition-related intangibles amortization;
Employee severance, litigation, and other;
Loss on consolidation of equity investments;
Impairment on non-customer note receivable;
Loss on early retirement of debt; and a
One-time tax reform adjustment.

In addition, we previously issued $600 million of 1.15 percent senior notes that were repaid in May 2017 to fund our initial special share repurchase program to mitigate the dilutive effect of the Warrants. The interest expense incurred relating to this borrowing has been excluded from the Non-GAAP presentation.

Second Quarter Adjusted (Non-GAAP) Results

Revenue: In the second quarter of fiscal 2018, revenue was $41.0 billion, up 10.5 percent compared to the same quarter in the previous fiscal year, reflecting a 10.4 percent increase in Pharmaceutical Distribution Services revenue and a 12.6 percent increase in revenue within Other.

Adjusted Gross Profit: Gross profit in the fiscal 2018 second quarter was $1.3 billion, which was up 9.2 percent when compared to the same period in the previous year, primarily due to the increase in gross profit in Pharmaceutical Distribution Services, which includes the acquisition of H. D. Smith and the consolidation of Profarma. Gross profit as a percentage of revenue was 3.11 percent, a decrease of 4 basis points from the prior year quarter.

Adjusted Operating Expenses: In the second quarter of fiscal 2018, operating expenses were $691.5 million, an increase of 18.9% compared to the same period in the last fiscal year. Operating expenses as a percentage of revenue in the fiscal 2018 second quarter were 1.69 percent, compared to 1.57 percent for the same period in the previous fiscal year. The increase in operating expenses was driven by the acquisition of H. D. Smith, consolidation of Profarma and the specialty joint venture in Brazil, operating additional distribution centers in the current year quarter and duplicate costs resulting from the implementation of new information technology systems, as well as increased costs to support our revenue growth.

Adjusted Operating Income: In the fiscal 2018 second quarter, operating income of $586.3 million decreased 0.4 percent from the prior year period. Operating income as a percentage of revenue decreased 15 basis points to 1.43 percent in the fiscal 2018 second quarter compared to the previous fiscal year’s second quarter.

Adjusted Interest Expense, Net: In the fiscal 2018 second quarter, net interest expense of $48.6 million was up 38.4 percent versus the prior year quarter, primarily due to the new debt issued to finance the H. D. Smith acquisition.

Adjusted Tax Rate: The effective tax rate for the second quarter of fiscal 2018 was 20.7 percent, down from 30.1 percent in the previous fiscal year’s second quarter, primarily driven by a reduction in the U.S. federal income tax rate from 35% to 21%.

Adjusted Diluted Earnings Per Share: Diluted earnings per share was up 9.6 percent to $1.94 in the second quarter of fiscal 2018 compared to $1.77 in the previous fiscal year’s second quarter, driven by the benefit from U.S. tax reform.

Diluted Shares Outstanding: Diluted weighted average shares outstanding for the second quarter of fiscal 2018 were 222.3 million, a 0.5 percent increase versus the prior fiscal year second quarter due primarily to stock option exercises, net of share repurchases.

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 $39.5 billion, an increase of 10.4 percent compared to the same quarter in the prior fiscal year. Segment operating income of $489.1 million in the March quarter of fiscal 2018 was up 0.9 percent compared to the same period in the previous fiscal year, primarily due to growth in revenues and gross profit, including the acquisition of H. D. Smith, largely offset by reduced sales at PharMEDium and the operating loss at Profarma.

Other
    
Revenue in Other was $1.6 billion in the second quarter of fiscal 2018, an increase of 12.6 percent compared to the same period in the prior fiscal year, primarily due to the consolidation of the specialty joint venture in Brazil and revenue growth from MWI, ABCS's growth in its Canadian operations and World Courier. Operating income in Other decreased 6.3 percent to $97.1 million in the second quarter of fiscal 2018. This decrease was primarily driven by performance at ABCS, specifically the Lash Group, and was partially offset by increased contributions from World Courier and MWI.

Recent Company Highlights & Milestones

Successfully completed on-boarding all of the 1,932 retail pharmacies acquired by Walgreens Boots Alliance through its phased acquisition of certain Rite Aid stores.
Recorded our 17th consecutive quarter with 10 percent or greater revenue growth in Specialty distribution.
World Courier opened four new offices in strategic markets worldwide to meet the growing demand for the specialty logistics services the company provides.
The AmerisourceBergen Foundation announced the creation of its External Advisory Board and Opioid Grant Resource Program and the donation of 55,000 drug deactivation resources to communities nationwide to combat the opioid epidemic.
ION Solutions hosted its Large Practice Program National Meeting in Washington, D.C. to bring together 500 of the nation’s leading community oncology professionals, including physicians, administrators, pharmacists, and industry leaders, to evaluate the challenges facing the community segment and create the best paths forward.

Fiscal Year 2018 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 2018 Expectations on an Adjusted (Non-GAAP) Basis
    
Based upon the Company’s performance in the first half of the fiscal year, evaluation of current business expectations and lower than previously anticipated operating income contributions from PharMEDium and the Lash Group, AmerisourceBergen has updated its fiscal year 2018 financial guidance. The higher operating expense growth expectation reflects the Company's current assumption that the PharMEDium remediation costs should be excluded from cost of goods sold instead of operating expenses. The Company expects:

Revenue growth in the range of 8 percent to 11 percent; and
Adjusted diluted earnings per share in the range of $6.45 to $6.65.

Additional expectations now include:

Adjusted operating expenses to increase between 8 percent to 10 percent;
Adjusted operating income growth to be flat;
Pharmaceutical Distribution Services segment operating income growth to be flat;
Other, which is comprised of businesses focused on Global Commercialization Services and Animal Health, operating income decline in the range of down 2 percent to 4 percent;
Adjusted effective tax rate of between 22 percent and 23 percent;
Adjusted free cash flow to be approximately $1.35 billion to $1.6 billion;
Capital expenditures of approximately $325 million; and
Share repurchases will offset dilution from employee stock option exercises.




AmerisourceBergen also continues to operate under the following working assumptions regarding the pharmaceutical market:

Brand drug inflation to be in the range of 6 percent to 7 percent;
Generic drug deflation to be in the range of -7 percent to -9 percent;
Contributions from new generic launches similar to the prior year; and
No significant contributions from biosimilars.

Conference Call & Slide Presentation

The Company will host a conference call to discuss the results at 8:30 a.m. ET on May 2, 2018. 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
Tim G. Guttman, Executive Vice President & Chief Financial Officer

The dial-in number for the live call will be (612) 288-0340. 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 446988.

Upcoming Investor Events

AmerisourceBergen management will be attending the following investor conference in the coming months:

Goldman Sachs Global Healthcare Conference in Rancho Palos Verdes, California from June 12-14, 2018.

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 #11 on the Fortune 500, with more than $150 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 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: 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, including the reserve recorded in connection with the proceedings with the United States Attorney’s Office for the Eastern District of New York; 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 action in connection with the production, labeling or packaging of products compounded by our compounded sterile preparations (CSP) business; suspension of production of CSPs, including at our Memphis 503B outsourcing facility; failure to realize the expected benefits from our reorganization and other business process initiatives; 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; 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; 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 with respect to foreign operations), 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 effects of disruption from the transactions on the respective businesses of the Company and H. D. Smith and the fact that the transactions may make it more difficult to establish or maintain relationships with employees, suppliers, customers and other business partners; 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; 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, 2017 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, 2018
 
% of
Revenue
 
Three
Months Ended
March 31, 2017
 
% of
Revenue
 
%
Change
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
41,033,858

 
 
 
$
37,147,402

 
 
 
10.5%
 
 
 
 
 
 
 
 
 
 
 
Cost of goods sold
 
39,778,175

 
 
 
35,890,975

 
 
 
10.8%
 
 
 
 
 
 
 
 
 
 
 
Gross profit 1
 
1,255,683

 
3.06%
 
1,256,427

 
3.38%
 
(0.1)%
 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
Distribution, selling, and administrative
 
617,426

 
1.50%
 
521,843

 
1.40%
 
18.3%
Depreciation and amortization
 
119,388

 
0.29%
 
97,669

 
0.26%
 
22.2%
Employee severance, litigation, and other 2
 
37,449

 

 
11,934

 

 
 
Total operating expenses
 
774,263

 
1.89%
 
631,446

 
1.70%
 
22.6%
 
 
 
 
 
 
 
 
 
 
 
Operating income
 
481,420

 
1.17%
 
624,981

 
1.68%
 
(23.0)%
 
 
 
 
 
 
 
 
 
 
 
Other loss (income) 3
 
29,123

 
 
 
(5,233
)
 
 
 
 
Interest expense, net
 
48,637

 

 
37,299

 
 
 
30.4%
Loss on consolidation of equity investments
 
42,328

 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
 
361,332

 
0.88%
 
592,915

 
1.60%
 
(39.1)%
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
79,172

 

 
181,442

 
 
 

 
 
 
 
 
 
 
 
 
 
 
Net income
 
282,160

 
0.69%
 
411,473

 
1.11%
 
(31.4)%
 
 
 
 
 
 
 
 
 
 
 
Net loss attributable to noncontrolling interest
 
5,295

 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to AmerisourceBergen Corporation
 
$
287,455

 
0.70%
 
$
411,473

 
1.11%
 
(30.1)%
 
 
 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
Basic
 
$
1.31

 
 
 
$
1.89

 
 
 
(30.7)%
Diluted
 
$
1.29

 
 
 
$
1.86

 
 
 
(30.6)%
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
Basic
 
219,200

 
 
 
217,650

 
 
 
0.7%
Diluted
 
222,303

 
 
 
221,221

 
 
 
0.5%
 ________________________________________


1 
Includes $0.3 million gain from antitrust litigation settlements and $22.5 million of remediation costs related to one of PharMEDium's compounding facilities in the three months ended March 31, 2018. Includes $86.5 million LIFO credit in the three months ended March 31, 2017.
 
2 
Includes $19.5 million of employee severance and other costs primarily related to business transformation efforts, $8.8 million of deal-related transaction costs primarily related to the acquisition of H.D. Smith, and $9.2 million of litigation costs primarily related to opioid lawsuits and investigations in the three months ended March 31, 2018. Includes $7.7 million of costs primarily related to facility closures and certain acquisition-related integration costs and $4.3 million of deal-related transaction costs in the three months ended March 31, 2017.

3 
Includes $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, 2018
 
% of
Revenue
 
Six
Months Ended
March 31, 2017
 
% of
Revenue
 
%
Change
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
81,500,190

 
 
 
$
75,316,667

 
 
 
8.2%
 
 
 
 
 
 
 
 
 
 
 
Cost of goods sold
 
79,131,855

 
 
 
73,022,560

 
 
 
8.4%
 
 
 
 
 
 
 
 
 
 
 
Gross profit 1
 
2,368,335

 
2.91%
 
2,294,107

 
3.05%
 
3.2%
 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
Distribution, selling, and administrative
 
1,175,948

 
1.44%
 
1,042,390

 
1.38%
 
12.8%
Depreciation and amortization
 
224,524

 
0.28%
 
193,749

 
0.26%
 
15.9%
Employee severance, litigation, and other 2
 
67,470

 
 
 
33,000

 
 
 
 
Total operating expenses
 
1,467,942

 
1.80%
 
1,269,139

 
1.69%
 
15.7%
 
 
 
 
 
 
 
 
 
 
 
Operating income
 
900,393

 
1.10%
 
1,024,968

 
1.36%
 
(12.2)%
 
 
 
 
 
 
 
 
 
 
 
Other loss (income) 3
 
29,447

 
 
 
(5,356
)
 
 
 
 
Interest expense, net
 
84,501

 
 
 
74,271

 
 
 
13.8%
Loss on consolidation of equity investments
 
42,328

 
 
 

 
 
 
 
Loss on early retirement of debt
 
23,766

 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes
 
720,351

 
0.88%
 
956,053

 
1.27%
 
(24.7)%
 
 
 
 
 
 
 
 
 
 
 
Income tax (benefit) expense
 
(423,662
)
 
 
 
297,334

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
1,144,013

 
1.40%
 
658,719

 
0.87%
 
73.7%
 
 
 
 
 
 
 
 
 
 
 
Net loss attributable to noncontrolling interest
 
5,295

 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to AmerisourceBergen Corporation
 
$
1,149,308

 
1.41%
 
$
658,719

 
0.87%
 
74.5%
 
 
 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
 
Basic
 
$
5.25

 
 
 
$
3.02

 
 
 
73.8%
Diluted
 
$
5.19

 
 
 
$
2.97

 
 
 
74.7%
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
Basic
 
218,763

 
 
 
218,166

 
 
 
0.3%
Diluted
 
221,565

 
 
 
221,611

 
 
 
—%
 ________________________________________


1 
Includes $0.3 million gain from antitrust litigation settlements and $22.5 million of remediation costs related to one of PharMEDium's compounding facilities in the six months ended March 31, 2018. Includes $58.2 million LIFO credit and $1.4 million gain from antitrust litigation settlements in the six months ended March 31, 2017.
 
2 
Includes $42.6 million of employee severance and other costs primarily related to business transformation efforts, $12.9 million of deal-related transaction costs primarily related to the acquisition of H.D. Smith, and $12.0 million of litigation costs primarily related to opioid lawsuits and investigations in the six months ended March 31, 2018. Includes $12.2 million of costs primarily related to facility closures and certain acquisition-related integration costs, $4.8 million of deal-related transaction costs, and $16.0 million for a litigation settlement in the six months ended March 31, 2017.

3 
Includes $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, 2018
 
 
Gross Profit
 
Operating
Expenses
 
Operating
Income
 
Income 
Before
Income Taxes
 
Income Tax Expense
 
Net Income Attributable
to ABC
 
Diluted
Earnings 
Per Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
 
$
1,255,683

 
$
774,263

 
$
481,420

 
$
361,332

 
$
79,172

 
$
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

 
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

 
431,866

 
1.94

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less non-wholly owned subsidiaries
 
37,206

 
41,693

 
(4,487
)
 
(8,570
)
 

 
(3,944
)
 
(0.02
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Non-GAAP excluding non-wholly owned subsidiaries
 
$
1,240,645

 
$
649,826

 
$
590,819

 
$
547,172

 
$
111,362

 
$
435,810

 
$
1.96

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Non-GAAP % change vs. prior year quarter
 
9.2%
 
18.9%
 
(0.4)%
 
(3.6)%
 
(33.7)%
 
10.5%
 
9.6%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Non-GAAP, excluding non-wholly owned subsidiaries, % change vs. prior year quarter
 
6.0%
 
11.8%
 
0.4%
 
(2.1)%
 
(33.7)%
 
11.6%
 
10.7%
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)
 
 
Three Months Ended March 31, 2017
 
 
Gross Profit
 
Operating
Expenses
 
Operating
Income
 
Interest
Expense, Net
 
Income Before Income Taxes
 
Income Tax Expense
 
Net Income Attributable
to ABC
 
Diluted
Earnings 
Per Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
 
$
1,256,427

 
$
631,446

 
$
624,981

 
$
37,299

 
$
592,915

 
$
181,442

 
$
411,473

 
$
1.86

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrants expense 1
 

 

 

 
(2,154
)
 
2,154

 
787

 
1,367

 
0.01

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain from antitrust litigation settlements
 

 

 

 

 

 
10

 
(10
)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIFO credit
 
(86,504
)
 

 
(86,504
)
 

 
(86,504
)
 
(32,502
)
 
(54,002
)
 
(0.24
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related intangibles amortization
 

 
(38,059
)
 
38,059

 

 
38,152

 
13,961

 
24,191

 
0.11

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee severance, litigation, and other
 

 
(11,934
)
 
11,934

 

 
11,934

 
4,300

 
7,634

 
0.03

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Non-GAAP
 
$
1,169,923

 
$
581,453

 
$
588,470

 
$
35,145

 
$
558,651

 
$
167,998

 
$
390,653

 
$
1.77

Percentages of Revenue:
 
GAAP
 
Adjusted
Non-GAAP
 
 
 
 
 
Gross profit
 
3.38%
 
3.15%
Operating expenses
 
1.70%
 
1.57%
Operating income
 
1.68%
 
1.58%
 


________________________________________

1  
In connection with the fiscal 2014 special $650 million share repurchase program, which was established to mitigate the dilutive effect of the Warrants, the Company issued $600 million of 1.15% senior notes that were repaid in May 2017. The interest expense incurred relating to this borrowing has been excluded from the non-GAAP presentation.
  
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 Income Attributable
to ABC
 
Diluted
Earnings 
Per Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
 
$
2,368,335

 
$
1,467,942

 
$
900,393

 
$
720,351

 
$
(423,662
)
 
$
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

 
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

 
774,292

 
3.49

2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less non-wholly owned subsidiaries
 
37,206

 
41,693

 
(4,487
)
 
(8,570
)
 

 
(3,944
)
 
(0.02
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Non-GAAP excluding non-wholly owned subsidiaries
 
$
2,353,297

 
$
1,274,428

 
$
1,078,869

 
$
999,129

 
$
220,893

 
$
778,236

 
$
3.51

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Non-GAAP % change vs. prior year period
 
7.0%
 
13.5%
 
—%
 
(1.9)%
 
(30.4)%
 
11.8%
 
11.5%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Non-GAAP, excluding non-wholly owned subsidiaries, % change vs. prior year period
 
5.3%
 
9.9%
 
0.4%
 
(1.1)%
 
(30.4)%
 
12.4%
 
12.1%
 
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  
Includes 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
GAAP TO NON-GAAP RECONCILIATIONS
(in thousands, except per share data)
(unaudited)
 
 
Six Months Ended March 31, 2017
 
 
Gross Profit
 
Operating
Expenses
 
Operating
Income
 
Interest
Expense, Net
 
Income Before Income Taxes
 
Income Tax Expense
 
Net Income Attributable
to ABC
 
Diluted
Earnings 
Per Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP
 
$
2,294,107

 
$
1,269,139

 
$
1,024,968

 
$
74,271

 
$
956,053

 
$
297,334

 
$
658,719

 
$
2.97

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrants expense 1
 

 

 

 
(4,309
)
 
4,309

 
1,608

 
2,701

 
0.01

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain from antitrust litigation settlements
 
(1,395
)
 

 
(1,395
)
 

 
(1,395
)
 
(521
)
 
(874
)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIFO credit
 
(58,196
)
 

 
(58,196
)
 

 
(58,196
)
 
(21,726
)
 
(36,470
)
 
(0.16
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related intangibles amortization
 

 
(76,288
)
 
76,288

 

 
76,474

 
28,549

 
47,925

 
0.22

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee severance, litigation, and other
 

 
(33,000
)
 
33,000

 

 
33,000

 
12,320

 
20,680

 
0.09

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Non-GAAP
 
$
2,234,516

 
$
1,159,851

 
$
1,074,665

 
$
69,962

 
$
1,010,245

 
$
317,564

 
$
692,681

 
$
3.13

Percentages of Revenue:
 
GAAP
 
Adjusted
Non-GAAP
 
 
 
 
 
Gross profit
 
3.05%
 
2.97%
Operating expenses
 
1.69%
 
1.54%
Operating income
 
1.36%
 
1.43%
 


________________________________________

1  
In connection with the fiscal 2014 special $650 million share repurchase program, which was established to mitigate the dilutive effect of the Warrants, the Company issued $600 million of 1.15% senior notes that were repaid in May 2017. The interest expense incurred relating to this borrowing has been excluded from the non-GAAP presentation.
  
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 AND SUBSIDIARIES
GAAP SUPPLEMENTAL INFORMATION
(In thousands)
(unaudited)
 
 
Three Months Ended March 31, 2018
 
 
AmerisourceBergen Corporation and Wholly Owned Subsidiaries
 
% Change vs. Prior Year Quarter
 
Non-Wholly Owned Subsidiaries
 
Noncontrolling
Interest
 
Consolidated AmerisourceBergen Corporation
 
% Change vs. Prior Year Quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
40,771,486

 
9.8
 %
 
$
262,372

 
$

 
$
41,033,858

 
10.5
 %
Gross profit
 
$
1,218,477

 
(3.0
)%
 
$
37,206

 
$

 
$
1,255,683

 
(0.1
)%
Operating expenses
 
$
732,570

 
16.0
 %
 
$
41,693

 
$

 
$
774,263

 
22.6
 %
Operating income (loss)
 
$
485,907

 
(22.3
)%
 
$
(4,487
)
 
$

 
$
481,420

 
(23.0
)%
Interest expense, net
 
$
45,677

 
22.5
 %
 
$
2,960

 
$

 
$
48,637

 
30.4
 %
Net income (loss)
 
$
290,730

 
(29.3
)%
 
$
(8,570
)
 
$
5,295

 
$
287,455

 
(30.1
)%

 
 
Six Months Ended March 31, 2018
 
 
AmerisourceBergen Corporation and Wholly Owned Subsidiaries
 
% Change vs. Prior Year Period
 
Non-Wholly Owned Subsidiaries
 
Noncontrolling
Interest
 
Consolidated AmerisourceBergen Corporation
 
% Change vs. Prior Year Period
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
81,237,818

 
7.9
 %
 
$
262,372

 
$

 
$
81,500,190

 
8.2
 %
Gross profit
 
$
2,331,129

 
1.6
 %
 
$
37,206

 
$

 
$
2,368,335

 
3.2
 %
Operating expenses
 
$
1,426,249

 
12.4
 %
 
$
41,693

 
$

 
$
1,467,942

 
15.7
 %
Operating income (loss)
 
$
904,880

 
(11.7
)%
 
$
(4,487
)
 
$

 
$
900,393

 
(12.2
)%
Interest expense, net
 
$
81,541

 
9.8
 %
 
$
2,960

 
$

 
$
84,501

 
13.8
 %
Net income (loss)
 
$
1,152,583

 
75.0
 %
 
$
(8,570
)
 
$
5,295

 
$
1,149,308

 
74.5
 %















AMERISOURCEBERGEN CORPORATION
SUMMARY SEGMENT INFORMATION
(dollars in thousands)
(unaudited)
 
 
Three Months Ended March 31,
Revenue
 
2018
 
2017
 
% Change
Pharmaceutical Distribution Services
 
$
39,453,353

 
$
35,745,360

 
10.4%
Other
 
1,594,378

 
1,415,850

 
12.6%
Intersegment eliminations
 
(13,873
)
 
(13,808
)
 

 
 
 
 
 
 
 
Revenue
 
$
41,033,858

 
$
37,147,402

 
10.5%
 
 
Three Months Ended March 31,
Operating income
 
2018
 
2017
 
% Change
Pharmaceutical Distribution Services
 
$
489,106

 
$
484,878

 
0.9%
Other
 
97,055

 
103,593

 
(6.3)%
Intersegment eliminations
 
171

 
(1
)
 
 
Total segment operating income
 
586,332

 
588,470

 
(0.4)%
 
 
 
 
 
 
 
Gain from antitrust litigation settlements
 
338

 

 
 
PharMEDium remediation costs
 
(22,506
)
 

 
 
LIFO credit
 

 
86,504

 
 
Acquisition-related intangibles amortization
 
(45,295
)
 
(38,059
)
 
 
Employee severance, litigation, and other
 
(37,449
)
 
(11,934
)
 
 
 
 
 
 
 
 
 
Operating income
 
$
481,420

 
$
624,981

 
 
 
 
 
 
 
 
 
Percentages of revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
Pharmaceutical Distribution Services
 
 
 
 
 
 
Gross profit
 
2.41%
 
2.42%
 
 
Operating expenses
 
1.17%
 
1.07%
 
 
Operating income
 
1.24%
 
1.36%
 
 
 
 
 
 
 
 
 
Other
 
 
 
 
 
 
Gross profit
 
20.48%
 
21.49%
 
 
Operating expenses
 
14.39%
 
14.17%
 
 
Operating income
 
6.09%
 
7.32%
 
 
 
 
 
 
 
 
 
AmerisourceBergen Corporation (GAAP)
 
 
 
 
 
 
Gross profit
 
3.06%
 
3.38%
 
 
Operating expenses
 
1.89%
 
1.70%
 
 
Operating income
 
1.17%
 
1.68%
 
 
 
 
 
 
 
 
 
AmerisourceBergen Corporation (Non-GAAP)
 
 
 
 
 
 
Adjusted gross profit
 
3.11%
 
3.15%
 
 
Adjusted operating expenses
 
1.69%
 
1.57%
 
 
Adjusted operating income
 
1.43%
 
1.58%
 
 



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
 
2018
 
2017
 
% Change
Pharmaceutical Distribution Services
 
$
78,391,051

 
$
72,543,649

 
8.1%
Other
 
3,139,329

 
2,800,340

 
12.1%
Intersegment eliminations
 
(30,190
)
 
(27,322
)
 
 
 
 
 
 
 
 
 
Revenue
 
$
81,500,190

 
$
75,316,667

 
8.2%
 
 
Six Months Ended March 31,
Operating income
 
2018
 
2017
 
% Change
Pharmaceutical Distribution Services
 
$
877,288

 
$
863,938

 
1.5%
Other
 
197,330

 
210,741

 
(6.4)%
Intersegment eliminations
 
(236
)
 
(14
)
 
 
Total segment operating income
 
1,074,382

 
1,074,665

 
—%
 
 
 
 
 
 
 
Gain from antitrust litigation settlements
 
338

 
1,395

 
 
PharMEDium remediation costs
 
(22,506
)
 

 
 
LIFO credit
 

 
58,196

 
 
Acquisition-related intangibles amortization
 
(84,351
)
 
(76,288
)
 
 
Employee severance, litigation, and other
 
(67,470
)
 
(33,000
)
 
 
 
 
 
 
 
 
 
Operating income
 
$
900,393

 
$
1,024,968

 
 
 
 
 
 
 
 
 
Percentages of revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
Pharmaceutical Distribution Services
 
 
 
 
 
 
Gross profit
 
2.22%
 
2.23%
 
 
Operating expenses
 
1.11%
 
1.04%