VALLEY FORGE, Pa.--(BW HealthWire)--Nov. 2, 2000--AmeriSource Health Corporation (NYSE:AAS) today reported record
results for its fiscal fourth quarter and year, ended September 30,
2000. In the quarter, income before special charges and extraordinary
items was a record $28.0 million, a 21 percent increase over the $23.0
million in the prior year's quarter. Earnings per diluted share in the
fiscal 2000 fourth quarter were $0.53, 18 percent ahead of the
comparable quarter's earnings per diluted share of $0.45, excluding
special charges and extraordinary items in 1999. Operating revenue in
the fiscal 2000 fourth quarter increased 18 percent, or $0.46 billion,
to a record $3.03 billion compared with $2.57 billion for the same
period last year.
For fiscal 2000, operating revenue reached a record $11.6 billion,
a 19 percent increase over the $9.8 billion last fiscal year.
Excluding special charges and extraordinary items in both years,
fiscal 2000 income increased 19 percent over the previous fiscal year
to a record $98.3 million and earnings per diluted share were up 17
percent to $1.89 per diluted share. Special charges in fiscal 2000
reflected a net positive impact of $0.7 million for the reversal of
restructuring reserves in the third quarter, and in the previous
fiscal year, they resulted in a net $12.0 million negative impact from
merger and restructuring costs in the fourth quarter. Also in the
fourth quarter of fiscal 1999, the Company recorded an extraordinary
charge, after tax, of $3.4 million related to the extinguishment of
debt linked to the acquisition of C.D. Smith. Net income in fiscal
2000 was $99.0 million, a 47 percent increase from the $67.5 million
in the previous fiscal year, and earnings per diluted share were up 45
percent to $1.90 from $1.31 in the comparable year.
R. David Yost, AmeriSource President and Chief Executive Officer,
said, "This record quarterly and yearly performance again demonstrates
our ability to deliver solid, consistent growth as we continue to
focus on pharmaceutical distribution and the related healthcare
solutions needed by our customers and suppliers. Our annual return on
committed capital, our key financial measurement of success, was a
record 25.2 percent, again exceeding our goal. Equally impressive was
our robust cash flow (from operations net of capital expenditures) of
almost $200 million for fiscal 2000. We are especially pleased with
the results of the quarter because we are comparing against a strong
1999 fourth quarter, which was favorably impacted by the timing of
manufacturers' pricing decisions relating to Y2K.
"Revenue growth continued strong and profitable across our four
customer groups and across all regions. At the same time, we continue
to lower our expenses as a percent of revenue, firm in the belief that
success requires lean, highly efficient, focused operations.
"All four of our customer groups recorded double-digit increases
in revenue during the year. Health Systems, our market-leading
acute-care business, continued to build sales momentum through buying
group alliances such as Novation and Premier. Novation members have
nearly completed their every-third-year distributor selection process.
AmeriSource expects to increase its Novation business by more than
$500 million in annual revenue from new business which will begin to
ramp up during the first quarter of fiscal 2001. Key to these wins was
our reputation for exceptional customer service. In two independent
surveys of hospital executives, one by Novation members and the other
by a major investment company, AmeriSource was voted the best
distributor in customer service.
"Our Alternate Site business accelerated its growth by winning
major three-year contracts from Anthem Prescription Management and
Option Care. Our new five-year agreement with Medi-Cap Pharmacies
leads our efforts with the non-warehousing Chain Retailers, and
Independent Retail Pharmacies, where AmeriSource is a major player,
continued to grow same store sales in double digits."
Kurt J. Hilzinger, AmeriSource Chief Operating Officer, continued,
"Fiscal 2000 also saw the completion of our centralization initiative
begun about two years ago, the successful integration of our C.D.
Smith acquisition, and the introduction of numerous new value-added
offerings for our customers.
"The centralization initiative was focused on improving costs and
productivity by standardizing those activities which did not directly
touch the customer. The effort was anchored in the conversion of our
21 distribution facilities to a common information technology
platform. It also included centralizing procurement, which has
improved our supply-side margin contribution, reduced replenishment
inventory days on hand, and positioned us to provide value-added
solutions to our customers and suppliers.
"The C.D. Smith integration, which included upgrading two
facilities, closing another and converting to the AmeriSource IT
platform, was completed on plan, and the resulting business
performance exceeded our expectations for both the quarter and the
year.
"To boost our value-added offerings we acquired Pharmacy
Healthcare Solutions, a consulting company with a turn-key solution
for helping hospitals recover the pharmaceutical costs for indigent
patients. In the year ahead, we will continue to seek to add other
value-adding solutions.
"Most new offerings this year were dominated by technology as we
launched iEcho, our Internet-based ordering system built on our
market-leading Echo electronic ordering system, and VIP, our Virtual
Internet Pharmacy. VIP lets consumers shop online to our retail
customer's website using our large inventory of products and next-day
delivery capability. Our technology efforts were recently recognized
by Information Week Magazine, which named us as one of the 200 most
innovative companies in the use of technology among 24 different
industry groups."
Gross margin for the fourth quarter of fiscal 2000 as a percentage
of operating revenue was 4.58 percent versus 4.90 percent in the
comparable quarter. For the year, gross margin was 4.48 percent versus
4.85 percent in fiscal 1999. This expected year-to-year decline in
gross margin primarily reflects a shift in customer mix to a higher
level of institutional business and larger institutional accounts. The
Company's customer mix for fiscal 2000 consists of 51 percent
institutional, which includes Health Systems and Alternate Site, and
49 percent retail, including independent and chain pharmacies. Last
year the percentages were reversed with institutional contributing 48
percent and retail 52 percent.
Operating expenses as a percentage of operating revenue continued
its downward trend to 2.73 percent in the fourth quarter of fiscal
2000 from 3.10 percent in last year's fourth quarter. For the year,
the Company established a new annual low of 2.75 percent for operating
expenses as a percentage of revenue, down 32 basis points from last
year's 3.07 percent.
AmeriSource operating margin before special charges, as a
percentage of operating revenue for the quarter, improved to 1.84
percent versus 1.80 percent in last year's fourth quarter. For the
2000 fiscal year, operating margin before special charges was 1.73
percent versus 1.78 percent last year.
For the quarter, interest expense increased 12 percent to $10.7
million from $9.5 million in the previous year's fourth quarter,
reflecting higher interest rates, lower borrowing spreads and lower
average levels of debt. For fiscal 2000, interest expense was $41.9
million up 6 percent from last year's $39.4 million.
Looking ahead, Yost said, "We continue to be well-positioned for
further growth. We are in an industry with strong fundamentals and we
have sales and marketing programs designed to expand our business in
both the institutional and retail marketplaces. We are investing in
the future with a new warehouse management system, expansion of our
packaging subsidiary, on-going technology investments, and other
activities to continue to improve productivity, lower our operating
costs and better meet customer needs.
"These and other initiatives make me confident that for fiscal
year 2001 we will deliver strong revenue and earnings growth while we
continue to display the discipline in running our business that will
achieve a return on committed capital of well over 20 percent. This
solid performance is anchored in our commitment to being recognized by
our customers as the highest quality service provider, to delivering
strong and consistent financial performance, and to building value for
our shareholders."
AmeriSource will host a conference call to discuss the fourth
quarter and fiscal year 2000 results at 11:00 a.m. Eastern Standard
Time today, November 2, 2000. In order to ensure the widest
distribution possible, the company will be broadcasting the conference
call over the Internet. The call will be accessible through Street
Events, www.streetevents.com, and also through AmeriSource's web site,
www.amerisource.com. Users are encouraged to log on to the call
approximately 15 minutes in advance. The call may not be recorded
without permission from AmeriSource. Replays of the webcast will be
posted on www.amerisource.com approximately two hours after the
completion of the call and will remain available until December 2,
2000.
About AmeriSource
AmeriSource Health Corporation, with nearly $12 billion in
operating revenue, is a leading distributor of pharmaceutical and
related healthcare services and the industry's largest provider of
pharmaceuticals to the acute care/health systems market. Headquartered
in Valley Forge, PA, the Company serves its base of about 15,000
customer accounts through a national network of more than 20
strategically located distribution facilities. For news and additional
information about the company, visit its web site at
www.amerisource.com.
Certain information contained in this press release includes
forward-looking statements (as defined in Section 27A of the
Securities Act and Section 21E of the Exchange Act) that reflect the
Company's current views with respect to future events and financial
performance. Certain factors such as competitive pressures, success of
restructuring or systems initiatives, market interest rates,
regulatory changes, continued industry consolidation, changes in
customer mix, changes in pharmaceutical manufacturers' pricing and
distribution policies, changes in U.S. government policies, customer
insolvencies, 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.
AMERISOURCE HEALTH CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)
Three Three
Months Months
Ended % of Ended % of
Sept. 30, Operating Sept. 30, Operating %
2000 Revenue 1999 Revenue Change
--------- --------- --------- --------- --------
Revenue:
Operating
revenue $3,027,776 100.00% $2,568,766 100.00% 18%
Bulk
deliveries
to customer
warehouses 3,954 10,154
---------- ----------
Total revenue 3,031,730 2,578,920
Cost of goods
sold:
Operating
cost of
goods sold 2,889,158 95.42% 2,442,838 95.10% 18%
Cost of
goods sold
- bulk
deliveries 3,954 10,154
---------- ----------
Total cost of
goods sold 2,893,112 2,452,992
---------- ----------
Gross profit 138,618 4.58% 125,928 4.90% 10%
Operating
expenses:
Selling and
administrative 78,526 2.59% 75,057 2.92% 5%
Depreciation
and
amortization 4,283 0.14% 4,588 0.18% -7%
Facility
consolidations
and employee
severance - 0.00% 11,730 0.46% -100%
Merger Costs - 0.00% 3,162 0.12% -100%
---------- ----------
Operating
income 55,809 1.84% 31,391 1.22% 78%
Interest
expense 10,654 0.35% 9,472 0.37% 12%
---------- ----------
Income before
taxes and
extraordinary
items 45,155 1.49% 21,919 0.85% 106%
Taxes on
income 17,159 0.57% 10,878 0.42% 58%
---------- ----------
Income before
extraordinary
items 27,996 0.92% 11,041 0.43% 154%
Extraordinary
items-early
retirement of
debt, net of
income tax
benefit - 0.00% 3,449 0.13% -100%
---------- ----------
Net income $27,996 0.92% $7,592 0.30% 269%
========== ==========
Earnings per
share:
Income before
extraordinary
items $0.54 $0.22
Extraordinary
items - (0.07)
---------- ----------
Net income $0.54 $0.15
========== ==========
Earnings per
share -
assuming
dilution:
Income before
extraordinary
items $0.53 $0.21
Extraordinary
items - (0.07)
---------- ----------
Net income $0.53 $0.15 (a)
========== ==========
Weighted
average common
shares
outstanding:
Basic 51,967 51,173
Assuming
dilution 52,770 51,647
--------------------------------------------------------------------
Pro forma results excluding $14,892 of merger costs and costs
related to facility consolidations and employee severance included in
the three months ended September 30, 1999:
Operating income $55,809 $46,283
Income before
extraordinary
items $27,996 $23,048
Net income $27,996 $19,599
Earnings per
share:
Income before
extraordinary
items $0.54 $0.45
Net income $0.54 $0.38
Earnings per
share -
assuming
dilution:
Income before
extraordinary
items $0.53 $0.45
Net income $0.53 $0.38
(a) Does not equal sum of amounts due to rounding
AMERISOURCE HEALTH CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
Twelve Twelve
Months Months
Ended % of Ended % of
Sept. 30, Operating Sept. 30, Operating %
2000 Revenue 1999 Revenue Change
------------ ------- ---------- ------- --------
Revenue:
Operating
revenue $ 11,609,995 100.00% $9,760,083 100.00% 19%
Bulk
deliveries
to
customer
warehouses 35,026 47,280
------------ ----------
Total
revenue 11,645,021 9,807,363
Cost of
goods sold:
Operating
cost of
goods sold 11,090,414 95.52% 9,287,018 95.15% 19%
Cost of
goods sold
- bulk
deliveries 35,026 47,280
------------ ----------
Total cost
of goods
sold 11,125,440 9,334,298
------------ ----------
Gross profit 519,581 4.48% 473,065 4.85% 10%
Operating
expenses:
Selling and
admini-
strative 303,038 2.61% 281,798 2.89% 8%
Deprecia-
tion and
amortiza-
tion 16,109 0.14% 17,373 0.18% -7%
Facility
consolida-
tions and
employee
severance (1,123) -0.01% 11,730 0.12% -110%
Merger
Costs -- 0.00% 3,162 0.03% -100%
------------ ----------
Operating
income 201,557 1.74% 159,002 1.63% 27%
Interest
expense 41,857 0.36% 39,356 0.40% 6%
Interest
expense -
adjustment
of common
stock put
warrant to
fair value -- 0.00% 334 0.00% -100%
------------ ----------
Income
before
taxes and
extra-
ordinary
items 159,700 1.38% 119,312 1.22% 34%
Taxes on
income 60,686 0.52% 48,397 0.50% 25%
------------ ----------
Income
before
extra-
ordinary
items 99,014 0.85% 70,915 0.73% 40%
Extra-
ordinary
items-early
retirement
of debt,
net of
income tax
benefit -- 0.00% 3,449 0.04% -100%
------------ ----------
Net income $ 99,014 0.85% $ 67,466 0.69% 47%
============ ==========
Earnings
per share:
Income
before
extra-
ordinary
items $1.92 $1.40
Extra-
ordinary
items - (0.07)
------------ ----------
Net income $1.92 $1.33
============ ==========
Earnings per
share -
assuming
dilution:
Income
before
extra-
ordinary
items $1.90 $1.38
Extra-
ordinary
items - (0.07)
------------ ----------
Net income $1.90 $1.31
============ ==========
Weighted
average
common
shares
outstand-
ing:
Basic 51,552 50,698
Assuming
dilution 52,020 51,683
--------------------------------------------------------------------
Pro forma results excluding ($1,123) and $14,892 of merger costs
and costs related to facility consolidations and employee severance
included in the years ended September 30, 2000 and 1999, respectively:
Operating
income $200,434 $173,894
Income before
extra-
ordinary
items $98,318 $82,922
Net income $98,318 $79,473
Earnings per
share:
Income
before
extra-
ordinary
items $1.91 $1.64
Net income $1.91 $1.57
Earnings per
share -
assuming
dilution:
Income before
extra-
ordinary
items $1.89 $1.61
Net income $1.89 $1.54
AMERISOURCE HEALTH CORPORATION
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
ASSETS
Sept. 30, Sept. 30, Increase
2000 1999 (Decrease)
----------- ------------ ------------
Current assets:
Cash and cash
equivalents $ 120,818 $ 59,497 $ 61,321
Accounts
receivable,
less allowance
for doubtful
accounts 623,961 612,520 11,441
Merchandise
inventories 1,570,504 1,243,153 327,351
Prepaid expenses
and other 5,336 4,836 500
----------- ----------- -----------
Total
current
assets 2,320,619 1,920,006 400,613
Property and
equipment, net 64,962 64,384 578
Other assets,
less accumulated
amortization 72,986 76,209 (3,223)
----------- ----------- -----------
Total assets $ 2,458,567 $ 2,060,599 $ 397,968
=========== =========== ===========
LIABILITIES
AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 1,584,133 $ 1,175,619 $ 408,514
Accrued expenses
and other 49,398 50,329 (931)
Accrued income
taxes 12,284 10,854 1,430
Deferred income
taxes 105,654 90,481 15,173
----------- ----------- ----------
Total
current
liabilities 1,751,469 1,327,283 424,186
Long-term debt:
Revolving credit
facility 20,000 225,227 (205,227)
Receivables
securitization
financing 385,000 325,000 60,000
Other debt 8,217 8,478 (261)
Other
liabilities 11,587 8,334 3,253
Stockholders'
equity:
Common stock and
capital in
excess of par
value 284,132 267,315 16,817
Retained
earnings
(accumulated
deficit) 4,382 (94,632) 99,014
Cost of common
stock in
treasury (6,220) (6,220) 0
Note receivable
from ESOP 0 (186) 186
----------- ----------- ----------
Total
stockholders'
equity 282,294 166,277 116,017
----------- ----------- ----------
Total
liabilities
and
stockholders'
equity $ 2,458,567 $ 2,060,599 $ 397,968
=========== =========== ==========
CONTACT: |
AmeriSource Health Corporation |
---|
|
Michael N. Kilpatric, 610/727-7118 |
---|
|
mkilpatric@amerisource.com |
---|
|
---|
|
---|