MALVERN, Pa.--(BUSINESS WIRE)--April 27, 2000--AmeriSource Health
Corporation (NYSE:AAS) today reported record results for its second
fiscal quarter and six months ended March 31, 2000. Operating revenue
increased 19 percent, or $459.2 million, to $2.8 billion in the
quarter compared to $2.4 billion for the same period last year. Net
income for the quarter was up 20 percent to $24.3 million from $20.2
million, and earnings per share increased 21 percent to $.47 per
diluted share from $.39 per diluted share in the prior year.
For the first six months of fiscal 2000, operating revenue
increased 20 percent to $5.7 billion compared to $4.7 billion in the
prior year. Net income for the first six months of fiscal 2000
increased by 20 percent to $45.9 million or $.89 per diluted share
from $38.1 million or $.74 per diluted share for the same period one
year ago.
R. David Yost, AmeriSource President and Chief Executive Officer,
said, ''This was an outstanding quarter for AmeriSource. We
demonstrated strong revenue momentum with nearly all of our key
performance metrics meeting or exceeding our internal expectations. We
continue to add new business with solid returns across our geography
and customer segments, and our centralization initiatives are nearly
finished.
''In addition, two significant activities occurred following the
end of the quarter. First, we agreed, with four other companies, to
form the New Health Exchange, an internet initiative that will focus
on efficiency and connectivity across the healthcare supply chain,
enabling the participants to collectively achieve what no single
company acting on its own could accomplish. The Exchange will move to
streamline the chargeback and rebate process, standardize product
information and product content descriptions, and augment each
company's existing Internet strategy.
''Second, our acute-care hospital business, where we are the U.S.
leader, is growing ever stronger as we expand our buying group
alliances. Novation, the supply company of VHA Inc. and the University
Health System Consortium, again selected us as one of its primary
suppliers, and the members of VHA and UHC, in a customer service
satisfaction survey, voted us the top pharmaceutical distributor. We
also strengthened our already powerful relationship with Premier.
These new initiatives will add to our momentum going forward.''
For the second quarter of fiscal 2000, the Company's gross margin
as a percentage of operating revenue was 4.64 percent versus 5.18
percent in the prior year. This expected year-to-year decline in gross
margin primarily reflects a shift in customer mix to a higher level of
institutional/hospital business and was partly offset by a decrease in
operating expenses. The Company's customer mix in the current quarter
consists of 51 percent institutions/hospitals, 37 percent independent
pharmacies, and 12 percent retail chains.
Operating expenses as a percentage of operating revenue declined
by 38 basis points to 2.84 percent in the second quarter of fiscal
2000 from 3.22 percent a year ago. This significant reduction was
driven by cost reductions related to centralization efforts,
increasingly more efficient warehouse operations and the shift in
customer mix.
The Company's operating income advanced 10 percent to $51.1
million in the second quarter of fiscal year 2000 from $46.5 million
for the same quarter last year. For the first six months of fiscal
year 2000 operating income increased 12 percent over the same period
last year. For the second quarter, operating margin, as a percentage
of operating revenue, was 1.80 percent compared to 1.96 percent for
the prior year period.
Interest expense, excluding the adjustment of a common stock put
warrant to fair value in fiscal 1999, increased by 3 percent to $11.9
million, reflecting the net impact of higher interest rates, lower
borrowing spreads and lower average levels of debt. Cash flow for the
quarter was strong, reflecting the liquidation of Y2K inventories as
well as normal seasonal patterns. Debt was reduced by $251 million
from $720 million at December 31,1999 to $469 million at March
31,2000. The Company's return on committed capital--ROCC-- for the
quarter continued strong at a 24.2 percent.
In looking ahead, Mr. Yost said, ''The best metric of our success
continues to be our return on committed capital, which measures the
effectiveness of our asset management. At 24.2 percent, our ROCC
exceeded our goals as we continue to make the right business
decisions. We operate in a solid industry with good fundamentals, and
AmeriSource is exceptionally well-positioned in the healthcare supply
channel. We remain committed to our long-term goals of being
recognized by our customers as the highest quality service provider,
delivering strong and consistent financial performance, and building
value for our shareholders.''
AmeriSource, with over $10 billion in operating revenue, is one of
the nation's leading, full-service wholesale distributors of
pharmaceutical products and related healthcare services. Headquartered
in Malvern, PA, the Company serves its base of 21,000 customers
accounts through a national network of 24 strategically located
distribution facilities. AmeriSource is the industry's largest
provider of pharmaceuticals to the acute care/institutional market.
For more information about AmeriSource, visit our website at
www.amerisource.com.
Certain information contained in this press release includes
forward-looking statements (as defined in Section 27A of the
Securities Act and Section 21E of the Exchange Act) that reflect the
Company's current views with respect to future events and financial
performance. Certain factors such as competitive pressures, success of
restructuring initiatives, continued industry consolidation, changes
in customer mix, changes in pharmaceutical manufacturers' pricing and
distribution policies, the loss of one or more key customer or
supplier relationships and other matters contained in the Company's
10-K for fiscal year 1999 and other public documents could cause
actual results to differ materially from those in the forward-looking
statements. The company assumes no obligation to update the matters
discussed in this press release.
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AMERISOURCE HEALTH CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(Unaudited)
Three Three
Months Months
Ended % of Ended % of
March 31, Operating March 31, Operating %
2000 Revenue 1999(a) Revenue Change
----------- --------- ---------- ---------- ------
Revenue:
Operating
revenue $2,832,041 100.00% $2,372,872 100.00% 19%
Bulk deliveries
to customer
warehouses 10,162 12,299
----------- -----------
Total revenue 2,842,203 2,385,171
----------- -----------
Cost of goods sold:
Operating cost of
goods sold 2,700,635 95.36% 2,249,886 94.82% 20%
Cost of goods
sold - bulk
deliveries 10,162 12,299
----------- -----------
Total cost of goods
sold 2,710,797 2,262,185
----------- -----------
Gross profit 131,406 4.64% 122,986 5.18% 7%
Operating expenses:
Selling and
administrative 76,323 2.69% 72,238 3.04% 6%
Depreciation and
amortization 3,969 0.14% 4,268 0.18% -7%
----------- -----------
Operating income 51,114 1.80% 46,480 1.96% 10%
Interest expense 11,922 0.42% 11,582 0.49% 3%
Interest expense -
adjustment of common
stock put warrant to
fair value - 1,223 0.05% -100%
----------- -----------
Income before taxes 39,192 1.38% 33,675 1.42% 16%
Taxes on income 14,893 0.53% 13,456 0.57% 11%
----------- -----------
Net income $24,299 0.86% $20,219 0.85% 20%
=========== ===========
Earnings per
share (a):
Basic $0.47 $0.40
Assuming dilution $0.47 $0.39
Weighted average
common shares
outstanding (a):
Basic 51,370 50,555
Assuming dilution 51,732 51,574
(a) Prior year restated for July 1999 C. D. Smith merger accounted
for as a pooling of interests.
AMERISOURCE HEALTH CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(Unaudited)
Six Six
Months Months
Ended % of Ended % of
March 31, Operating March 31, Operating %
2000 Revenue 1999(a) Revenue Change
----------- --------- ---------- ---------- ------
Revenue:
Operating
revenue $5,660,795 100.00% $4,735,520 100.00% 20%
Bulk deliveries
to customer
warehouses 20,790 24,386
----------- -----------
Total revenue 5,681,585 4,759,906
Cost of goods
sold:
Operating
cost of goods
sold 5,409,462 95.56% 4,501,408 95.06% 20%
Cost of goods
sold - bulk
deliveries 20,790 24,386
----------- -----------
Total cost of
goods sold 5,430,252 4,525,794
----------- -----------
Gross profit 251,333 4.44% 234,112 4.94% 7%
Operating
expenses:
Selling and
administrative 146,568 2.59% 139,411 2.94% 5%
Depreciation
and amortization 7,916 0.14% 8,557 0.18% -7%
----------- -----------
Operating
income 96,849 1.71% 86,144 1.82% 12%
Interest expense 22,820 0.40% 21,666 0.46% 5%
Interest expense -
adjustment of
common stock put
warrant to fair
value - 1,833 0.04% -100%
----------- -----------
Income before
taxes 74,029 1.31% 62,645 1.32% 18%
Taxes on income 28,131 0.50% 24,531 0.52% 15%
----------- -----------
Net income $45,898 0.81% $38,114 0.80% 20%
=========== ===========
Earnings per
share (a):
Basic $0.89 $0.76
Assuming dilution $0.89 $0.74
Weighted average
common shares
outstanding (a):
Basic 51,329 50,444
Assuming dilution 51,612 51,295
(a) Prior year restated for July 1999 C. D. Smith merger accounted
for as a pooling of interests.
AMERISOURCE HEALTH CORPORATION
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
ASSETS (unaudited)
March 31, Sept. 30, Increase
2000 1999 (Decrease)
------------ ------------ ------------
Current assets:
Cash and cash
equivalents $ 49,240 $ 59,497 ($ 10,257)
Accounts receivable,
less allowance for
doubtful accounts 642,485 612,520 29,965
Merchandise
inventories 1,272,795 1,243,153 29,642
Prepaid expenses
and other 4,550 4,836 (286)
----------- ----------- -----------
Total current
assets 1,969,070 1,920,006 49,064
Property and
equipment, net 63,400 64,384 (984)
Other assets, less
accumulated
amortization 69,226 76,209 (6,983)
----------- ----------- -----------
Total assets $ 2,101,696 $ 2,060,599 $ 41,097
=========== =========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,254,829 $ 1,175,619 $ 79,210
Accrued expenses and
other 46,247 50,329 (4,082)
Accrued income taxes 8,628 10,854 (2,226)
Deferred income taxes 99,822 90,481 9,341
----------- ----------- -----------
Total current
liabilities 1,409,526 1,327,283 82,243
Long-term debt:
Revolving credit
facility 136,046 225,227 (89,181)
Receivables
securitization
financing 325,000 325,000 0
Other debt 8,352 8,478 (126)
Other liabilities 8,980 8,334 646
Stockholders' equity:
Common stock and
capital in excess
of par value 268,746 267,315 1,431
Accumulated deficit (48,734) (94,632) 45,898
Cost of common stock
in treasury (6,220) (6,220) 0
Note receivable
from ESOP -- (186) 186
----------- ----------- -----------
Total stockholders'
equity 213,792 166,277 47,515
----------- ----------- -----------
Total liabilities
and stockholders'
equity $ 2,101,696 $ 2,060,599 $ 41,097
=========== =========== ===========
Contact: AmeriSource Health
G. L. James, Chief Financial Officer, 610/993-7736
jjames@amerisource.com