Company Moved Quickly To Maximize Benefits Of Year-Ago Merger
Fiscal Fourth Quarter Highlights
-- Record diluted earnings per share of $.88 before special
charges.
-- Record operating revenue of $10.4 billion, up 14 percent, pro
forma.
-- Operating margin of 1.91 percent, up 12 basis points, pro
forma.
-- Return On Committed Capital (ROCC) of 25.5 percent.
Fiscal 2002 Highlights
-- Record diluted earnings per share of $3.29 before special
charges.
-- Record operating revenue of $40.2 billion, up 16 percent, pro
forma.
-- Cost saving synergies captured ahead of schedule.
-- Consolidated seven distribution centers and two specialty
operations.
-- Cash flow from operations of more than $500 million.
"Our success is a reflection of the dedication and hard work of our associates.
They made it happen on the firing line. The financial result was a more than 40
percent increase in earnings per share and $40 billion in revenue for the year.
Combined with our 25.5 percent ROCC, we exceeded our key financial goals.
"From the beginning, it has not been about being the biggest, but the best. In
one year, we have laid a solid foundation, and we have only begun to tap the
potential of AmerisourceBergen. With our number one position in the market, a
growing array of services and products, and a commitment to maximize our synergy
opportunities, we remain dedicated to increasing value for our shareholders,
customers, suppliers and associates."
Discussion of Results
Diluted earnings per share before special charges for the fourth quarter of
fiscal 2002 were $0.88, a 38 percent increase over the prior year's fourth
quarter. Income before special charges for the fourth quarter of fiscal 2002
increased to $97.3 million from $47.2 million in the same period last year.
Special charges, consisting of merger integration costs, were $2.3 million, net
of tax, in the quarter. Net income and diluted earnings per share for the
quarter were $95.0 million and $0.86, respectively.
AmerisourceBergen's operating revenue, which excludes bulk deliveries to
customer warehouses, was $10.4 billion in the fourth quarter of fiscal 2002
compared to $5.5 billion for the same period last year. Fiscal 2002 fourth
quarter operating revenue increased 14 percent over fiscal 2001 fourth quarter
pro forma operating revenue of $9.1 billion.
For the 2002 fiscal year, diluted earnings per share before special charges were
$3.29, a 42 percent increase over the prior year. Income before special charges
for the year increased to $359.6 million from $137.0 million last year. Special
charges, consisting of merger integration costs, were $14.6 million, net of tax,
in fiscal year 2002. Operating revenue for the fiscal year ended September 30,
2002 was $40.2 billion compared to $15.8 billion in the prior year, and
represents a 16 percent increase over pro forma operating revenue of $34.6
billion in fiscal year 2001. Net income and diluted earnings per share for the
2002 fiscal year were $344.9 million and $3.16, respectively.
The following discussion of results, including segment data, does not include
the impact of special charges.
"In the fiscal 2002 fourth quarter, our outstanding performance was driven by
our continual focus on customer service, synergy cost savings ahead of internal
expectations, and strong working capital management," said Kurt J. Hilzinger,
AmerisourceBergen President and Chief Operating Officer. "The result was a
double digit expansion in operating margin, record earnings per share and a ROCC
of 25.5 percent.
"In pharmaceutical distribution we consolidated four distribution centers in the
September quarter bringing the total number of consolidations in the fiscal year
to seven, in line with the schedule we set at the beginning of the fiscal year.
Our new generic pharmaceutical program, PROGenerics(TM), also contributed to the
quarter's strong performance.
"With the integration of the key functional areas now nearly complete, in fiscal
2003 we will continue to work toward building our new distribution network and
introducing new offerings to our customers in the pharmaceutical supply channel.
We expect to consolidate six larger distribution centers in the coming fiscal
year as well as begin building a number of new facilities and expanding others.
Retail and institutional customers will see new programs to solve challenges
such as staffing shortages, cost constraints and dispensing accuracy.
"In our PharMerica segment, strong revenue growth in the fiscal 2002 fourth
quarter of 14 percent, pro forma, reflects continued solid performance by
PharMerica's workers' compensation business, as well as improved growth in the
long-term care business," said Hilzinger. "The favorable impact of a single
information technology platform, continued receivable and operating discipline,
and the positive impact of the new generic pharmaceutical program, drove
PharMerica's performance in the quarter."
Segment Review
Pharmaceutical Distribution Segment
Pharmaceutical Distribution customer mix in the fourth quarter of fiscal 2002
was 54 percent institutional and 46 percent retail, and for fiscal year 2002 the
mix was 53 percent institutional and 47 percent retail. Both customer groups had
double-digit growth in the quarter and year.
Operating income was $174.6 million in the fourth quarter of fiscal 2002, up
from $94.8 million for the same quarter last year, and improved 22 percent
compared to pro forma operating income of $143.2 million in the same period last
year. For the fiscal 2002 fourth quarter, operating income as a percentage of
operating revenue was 1.72 percent, an 11 basis point improvement from the prior
year's fourth quarter on a pro forma basis. Lower gross margins, which reflect
the Company's customer mix and the competitive environment, were more than
offset by lower total operating expenses as a percentage of operating revenue.
Total operating expenses as a percentage of operating revenue in the fiscal 2002
fourth quarter were 2.20 percent, a 31 basis point improvement over the same
quarter last year on a pro forma basis driven by synergy cost savings, customer
mix and operating leverage.
AmerisourceBergen Specialty Group, with annualized revenue of more than $2.5
billion, continued its strong quarterly performance, building significant
positions in oncology, blood plasma, injectables and vaccine distribution as
well as growing its manufacturing services business.
PharMerica
Operating income for the fourth quarter of fiscal 2002 was $22.9 million up from
$6.5 million for the same quarter last year, and improved 22 percent over the
prior year's pro forma fourth quarter operating income of $18.7 million.
Operating income as a percentage of operating revenue increased 40 basis points
in the quarter ended September 30, 2002 to 5.92 percent from 5.52 percent on a
pro forma basis in the prior year.
Looking Ahead
Conference Call
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November 5, 2002 until 11:59 p.m. November 12, 2002.
To access the replay via telephone:
Dial in: 800-475-6701 from within the U.S., access code: 654935
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To access the archived webcast:
About AmerisourceBergen
Forward-Looking Statements
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
AmerisourceBergen's filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for fiscal 2001, its Quarterly Reports
on Form 10-Q for fiscal 2002, and the joint proxy statement-prospectus for the
merger filed on August 1, 2001.
AmerisourceBergen is under no obligation to (and expressly disclaims any such
obligation to) update or alter any 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 Months
Ended % of Ended % of
September Operating September Operating %
30, 2002 Revenue 30, 2001 Revenue Change
----------- ------- ---------- ------- ------
Revenue:
Operating revenue $10,357,502 100.00% $5,516,347 100.00% 88%
Bulk deliveries to
customer warehouses 1,243,418 367,884
----------- ----------
Total revenue 11,600,920 5,884,231
Cost of goods sold 11,072,301 5,617,654 97%
----------- ----------
Gross profit 528,619 5.10% 266,577 4.83% 98%
Operating expenses:
Distribution,
selling and
administrative 314,184 3.03% 156,103 2.83% 101%
Depreciation and
amortization 16,962 0.16% 9,209 0.17% 84%
Facility
consolidations
and employee
severance -- 0.00% 10,912 0.20% -100%
Merger costs 3,859 0.04% 12,206 0.22% -68%
Environmental
remediation -- 0.00% (2,716) -0.05% -100%
----------- ----------
Operating income 193,614 1.87% 80,863 1.47% 139%
Equity in losses
of affiliates
and other 4,460 0.04% 6,285 0.11% -29%
Interest expense 31,663 0.31% 17,823 0.32% 78%
----------- ----------
Income before
taxes 157,491 1.52% 56,755 1.03% 177%
Income taxes 62,531 0.60% 22,172 0.40% 182%
----------- ----------
Net income $94,960 0.92% $34,583 0.63% 175%
=========== ==========
Earnings per share:
Basic $0.89 $0.49
Diluted $0.86 $0.48
Weighted average
common shares
outstanding:
Basic 106,225 70,628
Diluted 113,134 77,613
----------------------------------------------------------------------
Pro forma results excluding merger costs in the three months ended
September 30, 2002 and merger costs and costs related to facility
consolidations and employee severance and environmental remediation
included in the three months ended September 30, 2001:
Operating income $197,473 $101,265
Net income $97,287 $47,230
Earnings per share:
Basic $0.92 $0.67
Diluted $0.88 $0.64
AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)
Fiscal Fiscal
Year Ended % of Year Ended % of
September Operating September Operating %
30, 2002 Revenue 30, 2001 Revenue Change
----------- ------- ----------- ------- ------
Revenue:
Operating revenue $40,240,714 100.00% $15,822,635 100.00% 154%
Bulk deliveries
to customer
warehouses 4,994,080 368,718
------------ ------------
Total revenue 45,234,794 16,191,353
Cost of goods sold 43,210,320 15,491,235 179%
------------ ------------
Gross profit 2,024,474 5.03% 700,118 4.42% 189%
Operating expenses:
Distribution,
selling and
administrative 1,220,651 3.03% 397,848 2.51% 207%
Depreciation and
amortization 61,151 0.15% 21,589 0.14% 183%
Facility
consolidations
and employee
severance - 0.00% 10,912 0.07% -100%
Merger costs 24,244 0.06% 13,109 0.08% 85%
Environmental
remediation - 0.00% (2,716) -0.02% -100%
------------ ------------
Operating income 718,428 1.79% 259,376 1.64% 177%
Equity in losses
of affiliates
and other 5,647 0.01% 10,866 0.07% -48%
Interest expense 140,734 0.35% 47,853 0.30% 194%
------------ ------------
Income before taxes 572,047 1.42% 200,657 1.27% 185%
Income taxes 227,106 0.56% 76,861 0.49% 195%
------------ ------------
Net income $344,941 0.86% $123,796 0.78% 179%
============ ============
Earnings per share:
Basic $3.29 $2.16
Diluted $3.16 $2.10
Weighted average
common shares
outstanding:
Basic 104,935 57,185
Diluted 112,228 62,807
----------------------------------------------------------------------
Pro forma results excluding merger costs in the year ended September
30, 2002 and merger costs and costs related to facility conted financial summary and summary segment
information for the three-months and year ended September 30, 2001,
included in this press release, reflect only the results of
AmeriSource Health Corporation, as predecessor to the Company, through
August 29, 2001 and the results of AmerisourceBergen Corporation for
the period from August 29, 2001 through September 30, 2001
(collectively, the "Historical Results"). In order to enhance
comparability, the following schedules as well as the summary segment
information include fiscal 2001 financial data on a pro forma basis.
Within these schedules, pro forma refers to the Historical Results
combined with the results of Bergen Brunswig Corporation through
August 29, 2001. The pro forma information for fiscal 2001 has not
been prepared in accordance with generally accepted accounting
principles and does not represent consolidated results as if the
merger had occurred at the beginning of the periods presented. To
enhance comparability of financial information between fiscal years,
the pro forma information for fiscal 2001 excludes the amortization of
goodwill and special items related to the merger and environmental
remediation and reflects the full allocation of Bergen Brunswig
Corporation's former Corporate segment to the Pharmaceutical
Distribution and PharMerica segments. The pro forma information is not
necessarily indicative of the actual results which might have occurred
had the operations and management of AmeriSource Health Corporation
and Bergen Brunswig Corporation been combined at the beginning of
fiscal 2001.
Appendix - A(2)
AmerisourceBergen
Pro forma combined condensed financial information
(dollars in thousands)
(unaudited)
----------------------------------------------------------------------
Fiscal Year Ended September 30, 2001
--------------------------------------------------------
First Second Third Fourth Fiscal
Quarter Quarter Quarter Quarter Year (3)
(1) (1) (1) (2)
----------------------------------------------------------------------
Operating
revenue $8,083,535 $8,467,976 8,995,115 $9,052,684 $34,599,310
========================================================
Gross profit $442,249 $480,035 $475,810 $482,647 $1,880,741
Distribution,
selling and
administrative
(4) 293,608 303,730 295,462 304,703 1,197,503
Depreciation 13,891 14,337 14,296 14,641 57,165
Amortization
(5) 1,553 1,140 1,270 1,427 5,390
--------------------------------------------------------
Operating
income $133,197 $160,828 $164,782 $161,876 $620,683
========================================================
Gross profit
to operating
revenue 5.47% 5.67% 5.29% 5.33% 5.44%
Operating
expenses to
operating
revenue 3.82% 3.77% 3.46% 3.54% 3.64%
Operating
income to
operating
revenue 1.65% 1.90% 1.83% 1.79% 1.79%
(1) Represents the combination of AmeriSource Health Corporation's
and Bergen Brunswig Corporation's previously reported
financial information. (See discussion under Pro Forma
Information Appendix - A(1)).
(2) Represents the combination of AmerisourceBergen Corporation's
financial information for the quarter ended September 30,
2001, and Bergen Brunswig Corporation's historical financial
information for the period from July 1, 2001 to August 29,
2001. (See discussion under Pro Forma Information Appendix -
A(1)).
(3) Represents the combination of AmerisourceBergen Corporation's
previously reported financial information for the fiscal year
ended September 30, 2001, and Bergen Brunswig Corporation's
historical financial information for the period from October
1, 2000 to August 29, 2001. (See discussion under Pro Forma
Information Appendix - A(1)).
(4) Excludes special items in the third and fourth quarters
related to the merger and environmental remediation.
(5) Excludes amortization of goodwill.
Appendix - A(3)
AmerisourceBergen - Pharmaceutical Distribution
Pro forma combined condensed financial information
(dollars in thousands)
(unaudited)
----------------------------------------------------------------------
Fiscal Year Ended September 30, 2001
--------------------------------------------------------
First Second Third Fourth Fiscal
Quarter Quarter Quarter Quarter Year (3)
(1) (1) (1) (2)
----------------------------------------------------------------------
Operating
revenue $7,929,966 $8,335,337 $8,835,163 $8,885,145 $33,985,611
=======================================================
Gross profit $322,096 $358,294 $358,619 $365,948 $1,404,957
Distribution,
selling and
administrative
(4), (5) 195,464 202,915 200,042 211,501 809,922
Depreciation 9,426 9,962 9,916 10,278 39,582
Amortization
(6) 1,116 703 835 972 3,626
--------------------------------------------------------
Operating
income $116,090 $144,714 $147,826 $143,197 $551,827
========================================================
Gross profit
to operating
revenue 4.06% 4.30% 4.06% 4.12% 4.13%
Operating
expenses to
operating
revenue 2.60% 2.56% 2.39% 2.51% 2.51%
Operating
income to
operating
revenue 1.46% 1.74% 1.67% 1.61% 1.62%
(1) Represents the combination of AmeriSource Health Corporation's
and Bergen Brunswig Corporation's previously reported
financial information. (See discussion under Pro Forma
Information Appendix - A(1)).
(2) Represents the combination of AmerisourceBergen Corporation's
financial information for the quarter ended September 30,
2001, and Bergen Brunswig Corporation's historical financial
information for the period from July 1, 2001 to August 29,
2001. (See discussion under Pro Forma Information Appendix -
A(1)).
(3) Represents the combination of AmerisourceBergen Corporation's
previously reported financial information for the fiscal year
ended September 30, 2001, and Bergen Brunswig Corporation's
historical financial information for the period from October
1, 2000 to August 29, 2001. (See discussion under Pro Forma
Information Appendix - A(1)).
(4) Excludes special items in the third and fourth quarters
related to the merger and environmental remediation.
(5) Expenses previously reported in the Corporate segment for
Bergen Brunswig Corporation have been fully allocated to the
Pharmaceutical Distribution and PharMerica segments for
comparative purposes within this schedule.
(6) Excludes amortization of goodwill.
Appendix - A(4)
AmerisourceBergen - PharMerica
Pro forma combined condensed financial information
(dollars in thousands)
(unaudited)
----------------------------------------------------------------------
Fiscal Year Ended September 30, 2001
----------------------------------------------------
First Second Third Fourth Fiscal
Quarter Quarter Quarter Quarter Year (3)
(1) (1) (1) (2)
----------------------------------------------------------------------
Operating
revenue $335,166 $339,924 $336,783 $338,135 $1,350,008
====================================================
Gross profit $120,153 $121,741 $117,191 $116,699 $475,784
Distribution,
selling and
administrative
(4), (5) 98,144 100,815 95,420 93,202 387,581
Depreciation 4,465 4,375 4,380 4,363 17,583
Amortization (6) 437 437 435 455 1,764
----------------------------------------------------
Operating
income $17,107 $16,114 $16,956 $18,679 $68,856
====================================================
Gross profit to
operating
revenue 35.85% 35.81% 34.80% 34.51% 35.24%
Operating
expenses to
operating
revenue 30.74% 31.07% 29.76% 28.99% 30.14%
Operating
income to
operating
revenue 5.10% 4.74% 5.03% 5.52% 5.10%
(1) Represents the combination of AmeriSource Health Corporation's
and Bergen Brunswig Corporation's previously reported
financial information. (See discussion under Pro Forma
Information Appendix - A(1)).
(2) Represents the combination of AmerisourceBergen Corporation's
financial information for the quarter ended September 30,
2001, and Bergen Brunswig Corporation's historical financial
information for the period from July 1, 2001 to August 29,
2001. (See discussion under Pro Forma Information Appendix -
A(1)).
(3) Represents the combination of AmerisourceBergen Corporation's
previously reported financial information for the fiscal year
ended September 30, 2001, and Bergen Brunswig Corporation's
historical financial information for the period from October
1, 2000 to August 29, 2001. (See discussion under Pro Forma
Information Appendix - A(1)).
(4) Excludes special items in the third and fourth quarters
related to the merger and environmental remediation.
(5) Expenses previously reported in the Corporate segment for
Bergen Brunswig Corporation have been fully allocated to the
Pharmaceutical Distribution and PharMerica segments for
comparative purposes within this schedule.
(6) Excludes amortization of goodwill.
Appendix - A(5)
AmerisourceBergen - Intersegment Eliminations
Pro forma combined condensed financial information
(dollars in thousands)
(unaudited)
----------------------------------------------------------------------
Fiscal Year Ended September 30, 2001
-------------------------------------------------------
First Second Third Fourth Fiscal
Quarter Quarter Quarter Quarter Year (3)
(1) (1) (1) (2)
----------------------------------------------------------------------
Operating
revenue ($181,597) ($207,285) ($176,831) ($170,596) ($736,309)
=======================================================
Gross profit $0 $0 $0 $0 $0
Distribution,
selling and
administrative -- -- -- -- --
Depreciation -- -- -- -- --
Amortization -- -- -- -- --
-------------------------------------------------------
Operating
income $0 $0 $0 $0 $0
=======================================================
(1) Represents the combination of AmeriSource Health Corporation's
and Bergen Brunswig Corporation's previously reported
financial information. (See discussion under Pro Forma
Information Appendix - A(1)).
(2) Represents the combination of AmerisourceBergen Corporation's
financial information for the quarter ended September 30,
2001, and Bergen Brunswig Corporation's historical financial
information for the period from July 1, 2001 to August 29,
2001. (See discussion under Pro Forma Information Appendix -
A(1)).
(3) Represents the combination of AmerisourceBergen Corporation's
previously reported financial information for the fiscal year
ended September 30, 2001, and Bergen Brunswig Corporation's
historical financial information for the period from October
1, 2000 to August 29, 2001. (See discussion under Pro Forma
Information Appendix - A(1)).
CONTACT: AmerisourceBergen
Michael N. Kilpatric
610/727-7118
mkilpatric@amerisource.com