With AmeriSource Health Corporation and Bergen Brunswig Corporation merging on
August 29, 2001 to form the new company, AmerisourceBergen's results, under
purchase accounting rules, include the full fourth quarter and 2001 fiscal year
of AmeriSource and approximately one month of Bergen Brunswig.
AmerisourceBergen's operating revenue, which excludes bulk shipments, was a
record $5.5 billion in the fourth quarter compared to $3.0 billion for the same
period last year, an 82 percent increase. Excluding the revenue impact from the
merger, operating revenue in the quarter increased 20 percent compared to the
prior year.
Income before special items for the fiscal fourth quarter increased 69 percent
to $47.2 million from $28.0 million in the previous year's fourth quarter.
Diluted earnings per share before special items for the quarter were $0.64, a 21
percent increase.
Special items, which include merger costs, facility consolidations and employee
severance related to the merger, and the positive impact of a reduction in an
environmental liability, were a net charge of $12.6 million in the quarter after
tax. Net income and diluted earnings per share for the quarter, including
special items, were $34.6 million and $0.48, respectively.
AmerisourceBergen had 77.6 million weighted average diluted shares outstanding
for the fiscal fourth quarter.
For fiscal year 2001, operating revenue was a record $15.8 billion, a 36 percent
increase over the prior year's $11.6 billion. Excluding the revenue impact from
the merger, operating revenue was up 20 percent for the full fiscal year.
Income before special items for 2001 fiscal year was up 39 percent to $137.0
million from $98.3 million in the prior year. Diluted earnings per share before
special items for fiscal 2001 increased 22 percent to $2.31. For fiscal year
2001, special items were a net $13.2 million charge after tax.
Net income and diluted earnings per share for fiscal 2001 including special
items were $123.8 million and $2.10, respectively. AmerisourceBergen had 62.8
million weighted average diluted shares outstanding in fiscal 2001.
The following discussion of the fourth quarter and full year results, including
segment data, does not include the impact of the special items in 2001 or the
reversal of restructuring reserves in fiscal year 2000.
R. David Yost, AmerisourceBergen President and Chief Executive Officer, said,
"This was an outstanding performance by AmerisourceBergen in both the quarter
and the year. In its first report as a new company, AmerisourceBergen delivered
strong revenue growth, record earnings per share, and a very strong return on
committed capital (ROCC) of 26.7 percent.
"Quarterly revenue on a pro forma basis for AmeriSource and Bergen was up
strongly over fourth quarter last year, reflecting the continuing momentum of
both former companies.
"In the last two months we have moved quickly to integrate the two companies. We
have announced our seven operating regions, named the key executives in the
organization, established an integration office to coordinate our synergy
capture efforts, and have begun to operate as one company in the marketplace."
Segment Discussion
Pharmaceutical Distribution Segment
On a pro forma basis operating revenue in the fourth quarter for AmeriSource and
Bergen increased 20 percent and 13 percent, respectively. For fiscal 2001, pro
forma operating revenue was up 20 percent for AmeriSource and 11 percent for
Bergen compared to the previous fiscal year. Pharmaceutical distribution
customer mix on a prospective pro forma basis is 52 percent institutional and 48
percent retail.
For the fourth quarter of fiscal 2001, gross margin as a percentage of operating
revenue was 4.15 percent versus 4.58 percent in the prior year's last quarter.
The gross margin decrease was due to customer mix, a competitive environment,
and the inventory write-downs in the quarter of $5.6 million or 10 basis points,
primarily related to the cosmetic distribution subsidiary.
For the fiscal year, gross margin was 4.19 percent versus 4.48 percent in the
prior year.
Total operating expenses as a percentage of operating revenue declined 30 basis
points to 2.42 percent in the fourth quarter of fiscal 2001 from 2.72 percent a
year ago. For the full fiscal year, the ratio declined 29 basis points to 2.45
percent compared to 2.74 percent last year.
Operating income advanced 68 percent to $94.8 million in the fourth quarter of
fiscal year 2001 from $56.4 million for the same quarter last year. For the
fiscal fourth quarter, operating income, as a percentage of operating revenue
was 1.73 percent compared to 1.86 percent for the prior year period.
Operating margin was down 13 basis points, due primarily to the inclusion of the
corporate and administrative costs of Bergen in the quarter.
"As the leader in the Health Systems, Alternate Site, Community Pharmacy, and
Regional Drugstore Chain customer groups, AmerisourceBergen Drug Company has a
broad, diversified customer base that continues to provide the opportunity to
grow our drug company revenue," said Kurt Hilzinger, AmerisourceBergen Executive
Vice President and Chief Operating Officer. "The Drug Company continued to show
strong forward momentum as it expands current accounts and adds new business.
"Growth also continues to be strong in the Specialty Group as it builds on its
strong positions in oncology, blood plasma and vaccine distribution," he said.
Commenting on integration activities, Hilzinger said, "We continue to move
forward in an aggressive, but measured manner. Our integration plans reflect our
commitment to consolidate seven facilities in fiscal year 2002, beginning with
two smaller distribution centers next month.
"We are developing the information systems to effectively implement the other
distribution center consolidations, and we are consolidating our procurement
activities to improve our inventory productivity and vendor margin
contribution."
PharMerica
On a pro forma basis, fiscal 2001 fourth quarter revenue increased 5 percent to
$338.1 million from $323.5 million in the same period last year. Revenues for
the year increased 6 percent to $1.35 billion.
"PharMerica continues to improve its performance through a combination of
disciplined growth and expense control," said Hilzinger. "Asset management has
improved as illustrated by reductions in gross days-sales-outstanding (DSO),
which were 65 in the quarter, down from 83 in the same quarter last year. Net
DSOs dropped from 55 in the prior year's fourth quarter to 47 in the current
fourth quarter."
Looking Ahead
Conference Call
To access the live conference call via telephone:
Dial in: 800/230-1092 from inside the U.S. no access code required
or 612/332-0107 from outside the U.S. no access code
required.
To access the live webcast:
A replay of the telephone call and webcast will be available from 2:30 pm
November 8, 2001 until 11:59 pm November 15, 2001.
To access the replay via telephone:
Dial in: 800/475-6701 from within the U.S., access code: 607336
320/365-3844 from outside the U.S., access code: 607336
To access the archived webcast:
About AmerisourceBergen
The Company is also a leader in the institutional pharmacy marketplace. With
approximately $35 billion in annualized operating revenues, AmerisourceBergen is
headquartered in Valley Forge, PA, and employs more than 13,000 people serving
over 25,000 customers.
Forward-Looking Statements
Actual results may vary materially from the expectations contained in the
forward-looking statements. The forward-looking statements herein include
statements addressing future financial and operating results of
AmerisourceBergen and the benefits and other aspects of the merger.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: the risk that
the businesses of AmeriSource and Bergen Brunswig will not be integrated
successfully; failure to obtain and retain expected synergies; and other
economic, business, competitive and/or regulatory factors affecting the business
of AmerisourceBergen generally.
More detailed information about these factors is set forth in AmeriSource's and
Bergen Brunswig's filings with the Securities and Exchange Commission, including
each of their Annual Reports on Form 10-K for fiscal 2000, their most recent
quarterly reports on Form 10-Q, and their joint proxy statement-prospectus dated
August 1, 2001.
AmerisourceBergen, AmeriSource and Bergen Brunswig are under no obligation to
(and expressly disclaim any such obligation to) update or alter their
forward-looking statements whether as a result of new information, future events
or otherwise.
AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)
Three Three
Months Ended % of Months Ended % of
September 30, Operating September 30, Operating %
2001 Revenue 2000 Revenue Change
------------- --------- ------------ ---------- ------
Revenue:
Operating
revenue $5,516,347 100.00% $3,027,776 100.00% 82%
Bulk
deliveries to
customer
warehouses 367,884 3,954
---------- ----------
Total revenue 5,884,231 3,031,730
Cost of
goods sold 5,617,654 2,893,112 94%
---------- ----------
Gross profit 266,577 4.83% 138,618 4.58% 92%
Operating
expenses:
Distribution,
selling and
administrative 156,103 2.83% 77,958 2.57% 100%
Depreciation
and
amortization 9,209 0.17% 4,283 0.14% 115%
Facility
consolidations
and employee
severance 10,912 0.20% - 0.00% -
Merger costs 12,206 0.22% - 0.00% -
Environmental
remediation (2,716) -0.05% - 0.00% -
---------- ----------
Operating income 80,863 1.47% 56,377 1.86% 43%
Equity in losses
of affiliates
and other 6,285 0.11% 568 0.02% N/A
Interest expense 15,647 0.28% 10,654 0.35% 47%
---------- ----------
Income before
taxes and
distributions
on preferred
securities of
subsidiary
trust 58,931 1.07% 45,155 1.49% 31%
Taxes on income 23,042 0.42% 17,159 0.57% 34%
---------- ----------
Income before
distributions
on preferred
securities
of subsidiary
trust 35,889 0.65% 27,996 0.92% 28%
Distributions
on preferred
securities of
subsidiary
trust, net of
income tax
benefit of $871 1,306 0.02% - 0.00% N/A
---------- ----------
Net income $34,583 0.63% $27,996 0.92% 24%
---------- ----------
Earnings
per share:
Basic $0.49 $0.54
Assuming
dilution $0.48 $0.53
Weighted
average
common
shares
outstanding:
Basic 70,628 51,967
Assuming
dilution 77,613 52,770
======================================================================
Pro forma results excluding merger costs, costs related to facility
consolidations and employee severance and environmental remediation
included in the three months ended September 30, 2001:
Operating
income $101,265 $56,377
Net income $47,230 $27,996
Earnings per
share:
Basic $0.67 $0.54
Assuming
dilution $0.64 $0.53
AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
Year Ended % of Year Ended % of
Sept, 30, Operating Sept. 30, Operating %
2001 Revenue 2000 Revenue Change
----------- --------- ------------ -------- ------
Revenue:
Operating
revenue 15,822,635 100.00% $11,609,995 100.00% 36%
Bulk deliveries
to customer
warehouses 368,718 35,026
----------- -----------
Total revenue 16,191,353 11,645,021
Cost of goods
sold 15,491,235 11,125,440 39%
----------- -----------
Gross profit 700,118 4.42% 519,581 4.48% 35%
Operating
expenses:
Distribution,
selling and
administrative 397,848 2.51% 302,470 2.61% 32%
Depreciation
and
amortization 21,589 0.14% 16,109 0.14% 34%
Facility
consolidations
and employee
severance 10,912 0.07% (1,123) -0.01% N/A
Merger costs 13,109 0.08% - 0.00% -
Environmental
remediation (2,716) -0.02% - 0.00% -
----------- -----------
Operating income 259,376 1.64% 202,125 1.74% 28%
Equity in losses
of affiliates
and other 10,866 0.07% 568 0.00% N/A
Interest expense 45,677 0.29% 41,857 0.36% 9%
----------- -----------
Income before
taxes and
distributions
on preferred
securities of
subsidiary
trust 202,833 1.28% 159,700 1.38% 27%
Taxes on income 77,731 0.49% 60,686 0.52% 28%
----------- -----------
Income before
distributions
on preferred
securities of
subsidiary
trust 125,102 0.79% 99,014 0.85% 26%
Distributions on
preferred
securities of
subsidiary
trust, net of
income tax
benefit of $871 1,306 0.01% - 0.00% -
----------- -----------
Net income $123,796 0.78% $99,014 0.85% 25%
----------- -----------
Earnings per
share:
Basic $2.16 $1.92
Assuming
dilution $2.10 $1.90
Weighted average
common shares
outstanding:
Basic 57,185 51,552
Assuming dilution 62,807 52,020
======================================================================
Pro forma results excluding merger costs, costs related to facility
consolidations and employee severance and environmental remediation
included in the years ended September 30, 2001 and 2000, respectively:
Operating income $280,681 $201,002
Net income $137,003 $98,318
Earnings per share:
Basic $2.40 $1.91
Assuming dilution $2.31 $1.89
AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
ASSETS
September 30, September 30, $
2001 2000 Change
------------ ------------ -----------
Current assets:
Cash and
cash equivalents $ 297,626 $ 120,818 $ 176,808
Accounts
receivable, net 2,127,663 623,961 1,503,702
Merchandise
inventories 5,056,257 1,570,504 3,485,753
Prepaid expenses
and other 15,956 5,336 10,620
----------- ----------- -----------
Total current
assets 7,497,502 2,320,619 5,176,883
Long-term assets 2,752,178 137,948 2,614,230
----------- ----------- -----------
Total assets $10,249,680 $ 2,458,567 $ 7,791,113
=========== =========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,991,884 $ 1,584,133 $ 3,407,751
Other current
liabilities 532,739 167,336 365,403
----------- ----------- -----------
Total current
liabilities 5,524,623 1,751,469 3,773,154
Long-term debt,
less current
portion 1,582,295 413,217 1,169,078
Other liabilities 29,582 11,587 17,995
Company-obligated
manditorily redeemable
preferred securities
of subsidiary trust 274,616 -- 274,616
Stockholders' equity 2,838,564 282,294 2,556,270
----------- ----------- -----------
Total liabilities and
stockholders' equity $10,249,680 $ 2,458,567 $ 7,791,113
=========== =========== ===========
AMERISOURCE HEALTH CORPORATION
EARNINGS PER SHARE
(In thousands, except per share data)
(unaudited)
Earnings per share is computed on the basis of the weighted
average number of shares of common stock outstanding during the
periods presented. Earnings per share-assuming dilution is computed on
the basis of the weighted average number of shares of common stock
outstanding during the period plus the dilutive effect of stock
options. Additionally, the fiscal 2001 calculations consider the
convertible subordinated notes as if converted and, therefore, the
effect of interest expense related to those notes is added back to net
income in determining income available to common stockholders.
Three months ended Year ended
September 30, September 30,
-------------------- -------------------
2001 2000 2001 2000
--------- --------- -------- ---------
Net income $ 34,583 $ 27,996 $123,796 $ 99,014
Interest expense -
convertible
subordinated notes,
net of income tax 2,513 -- 8,112 --
-------- -------- -------- --------
Income available to
common stockholders $ 37,096 $ 27,996 $131,908 $ 99,014
======== ======== ======== ========
Weighted average
number of shares
of common stock
outstanding 70,628 51,967 57,185 51,552
Effect of dilutive
securities:
Stock options 1,321 803 1,076 468
Convertible
subordinated notes 5,664 -- 4,546 --
-------- -------- -------- --------
Weighted average number
of shares of common
stock and dilutive
potential common stock 77,613 52,770 62,807 52,020
======== ======== ======== ========
Earnings per share
Basic $ 0.49 $ 0.54 $ 2.16 $ 1.92
Assuming dilution $ 0.48 $ 0.53 $ 2.10 $ 1.90
AMERISOURCEBERGEN CORPORATION
SUMMARY SEGMENT INFORMATION
(dollars in thousands)
Three Months Ended
September 30,
-------------------------------
%
Operating Revenue 2001 2000 Change
----------------------------------------------------------------------
Pharmaceutical
Distribution $ 5,463,754 $ 3,027,776 80%
PharMerica 116,719 -- N/M
Intersegment
Eliminations (64,126) -- N/M
------------ ------------ ---
Operating
revenue $ 5,516,347 $ 3,027,776 82%
============ ============ ===
Year Ended
September 30,
-------------------------------
%
Operating Revenue 2001 2000 Change
------------------------------------------------------------
Pharmaceutical
Distribution $ 15,770,042 $ 11,609,995 36%
PharMerica 116,719 -- N/M
Intersegment
Eliminations (64,126) -- N/M
------------ ------------ ------------
Operating $ 15,822,635 $ 11,609,995 36%
revenue ============ ============ ============
Three Months Ended
September 30,
-------------------------------
%
Operating Income(a) 2001 2000 Change
----------------------------------------------------------------------
Pharmaceutical
Distribution $ 94,793 $ 56,377 68%
PharMerica 6,472 -- N/M
------------ ------------ ------------
Operating
income $ 101,265 $ 56,377 80%
============ ============ =============
Percentages of operating revenue(a):
Pharmaceutical
Distribution
Gross profit 4.15% 4.58%
Operating expenses 2.42% 2.72%
Operating income 1.73% 1.86%
PharMerica
Gross profit 34.06% --
Operating expenses 28.51% --
Operating income 5.55% --
AmerisourceBergen
Corporation
Gross profit 4.83% 4.58%
Operating expenses 3.00% 2.72%
Operating income 1.84% 1.86%
(a) Before special items
Year Ended
September 30,
-------------------------------
%
Operating Income(a) 2001 2000 Change
----------------------------------------------------------------
Pharmaceutical
Distribution $ 274,209 $ 201,002 36%
PharMerica 6,472 -- N/M
----------- ------------- -------------
Operating
income $ 280,681 $ 201,002 40%
============ ============ =============
Percentages of operating revenue(a):
Pharmaceutical
Distribution
Gross profit 4.19% 4.48%
Operating expenses 2.45% 2.74%
Operating income 1.74% 1.73%
PharMerica
Gross profit 34.06% --
Operating expenses 28.51% --
Operating income 5.55% --
AmerisourceBergen
Corporation
Gross profit 4.42% 4.48%
Operating expenses 2.65% 2.74%
Operating income 1.77% 1.73%
(a) Before special items
CONTACT: AmerisourceBergen, Valley Forge
Michael N. Kilpatric, 610/727-7118
mkilpatric@amerisource.com