VALLEY FORGE, Pa.--(BUSINESS WIRE)--Oct. 5,
2004--AmerisourceBergen Corporation (NYSE:ABC), a leading
pharmaceutical services company, today announced that, due to lower
than anticipated pharmaceutical price increases in the September
quarter of 2004, it expects earnings per diluted share for the fiscal
year ended September 30, 2004 to be between $3.95 and $4.05, excluding
special items.
The Company also announced that it anticipates diluted earnings
per share for fiscal 2005 to be between $4.20 and $4.30. Fiscal 2005
to fiscal 2004 comparisons are expected to be weakest in the first
part of the year, with the September quarter of fiscal 2005 expected
to post a diluted earnings per share increase of 15 percent or more
over the same quarter in 2004.
"We are clearly disappointed in our fiscal 2004 performance in
what has been a challenging time for our industry," said R. David
Yost, AmerisourceBergen's Chief Executive Officer. "We are taking
actions now to improve results and position AmerisourceBergen for what
we believe is a bright future. We will provide added detail on fiscal
2004 when we report our full results on November 2, 2004.
"Our guidance for fiscal 2005 is based on our recently completed
detailed budgeting process, and reflects the expectation that the U.S.
pharmaceutical market will grow at a low double-digit rate including
price appreciation for the fiscal year of approximately 5 percent.
Operating revenue and operating earnings for fiscal 2005 are
anticipated to be approximately the same as in fiscal 2004, with our
share repurchase program and expected lower interest expense providing
the anticipated diluted earnings per share growth in fiscal 2005. Our
continued discipline in capital management is expected to deliver
strong cash flow from operations of $375 million to $475 million in
fiscal 2005."
On August 13, 2004, AmerisourceBergen announced a $500 million
common stock repurchase program. Through September 30, 2004, the
Company has used approximately $145 million to repurchase outstanding
shares of common stock. AmerisourceBergen expects to complete the
remaining portion of the program by the end of fiscal year 2005.
"Our expectations continue to reflect the impact of the Veterans
Administration and AdvancePCS account losses in 2004 and the potential
impact on our physician customers of the new Medicare drug
reimbursement regulations," Yost explained. "Our Specialty Group,
which includes our physician customers, is expected to grow in line
with the U.S. pharmaceutical market.
"The PharMerica segment, which includes our institutional pharmacy
to long term care and workers' compensation businesses, is expected to
grow revenue in fiscal 2005 at a high single-digit rate with operating
income slightly below fiscal 2004 levels, as we confront a
increasingly competitive market and invest significant capital. We
expect to invest more than $30 million in the segment to consolidate
operations and add new customer-interface technology designed to
improve our competitive advantage and position these businesses for
future growth.
"Total capital expenditures for the Company are expected to be
between $175 million and $200 million in fiscal 2005 as we continue to
implement our Optmiz(TM) program. The Optimiz program is our
multi-year effort to create a distribution center network that will
position us as the low-cost leader and provide ample capacity for the
accelerated industry growth following the 2006 implementation of the
Medicare Modernization Act. During fiscal 2005, we expect to open new,
large, state-of-the-art distribution centers in Columbus, Ohio;
Dallas, Texas; and Chicago, Illinois, as well as consolidate an
additional four distribution centers. We expect to have a total of 32
distribution centers at the end of the fiscal year in our drug
distribution business, down from 51 in fiscal 2001."
"While fiscal 2005 will be a challenging year for
AmerisourceBergen, we remain excited about the growth opportunities in
pharmaceutical services and will continue to invest in our current
businesses," Yost said. "Although our fiscal 2005 guidance includes no
acquisitions, we will continue to pursue our disciplined acquisition
strategy."
About AmerisourceBergen
AmerisourceBergen (NYSE:ABC) is one of the largest pharmaceutical
services companies in the United States. Servicing both pharmaceutical
manufacturers and healthcare providers in the pharmaceutical supply
channel, the Company provides drug distribution and related services
designed to reduce costs and improve patient outcomes.
AmerisourceBergen's service solutions range from pharmacy automation,
bedside medication safety systems, and pharmaceutical packaging to
pharmacy services for skilled nursing and assisted living facilities,
reimbursement and pharmaceutical consulting services, and physician
education. With more than $47 billion in annualized operating revenue,
AmerisourceBergen is headquartered in Valley Forge, PA, and employs
more than 14,000 people. AmerisourceBergen is ranked #22 on the
Fortune 500 list. For more information, go to
www.amerisourcebergen.com.
FORWARD-LOOKING STATEMENTS
This news release may contain certain "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. These statements
are based on management's current expectations and are subject to
uncertainty and changes in circumstances. Actual results may vary
materially from the expectations contained in the forward-looking
statements. Forward-looking statements may include statements
addressing future financial and operating results of AmerisourceBergen
and the benefits and other aspects of the 2001 merger between
AmeriSource Health Corporation and Bergen Brunswig Corporation.
The following factors, among others, could cause actual results to
differ materially from those described in any forward-looking
statements: competitive pressures; the loss of one or more key
customer relationships; customer insolvencies; changes in customer
mix; changes in pharmaceutical manufacturers' pricing and distribution
policies; regulatory changes; changes in U.S. government policies;
failure to integrate the businesses of AmeriSource and Bergen Brunswig
successfully; failure to obtain and retain expected synergies from the
merger of AmeriSource and Bergen Brunswig; and other economic,
business, competitive, regulatory and/or operational 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 2003.
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.
CONTACT: AmerisourceBergen Corporation, Valley Forge
Michael N. Kilpatric, 610-727-7118
mkilpatric@amerisourcebergen.com
SOURCE: AmerisourceBergen Corporation