Company Increases Fiscal Year 2010 EPS Guidance to a Range of $1.89 to $1.98Fiscal First Quarter Highlights
-
Record revenue of $19.3 billion, up 11.5 percent.
-
Record diluted earnings per share of $0.52, a 44 percent increase.
-
Operating expense ratio of 1.56 percent, down 12 basis points.
-
Operating margin of 1.36 percent, up 22 basis points.
-
$145 million of share repurchases.
"In the December quarter, we delivered exceptional performance across
all our businesses, reflecting strong revenue growth, successful generic
drug launches, and continued expense and working capital discipline,"
said R. David Yost, AmerisourceBergen's President and Chief Executive
Officer. "Revenue in the quarter was up 11.5 percent, with approximately
half of the growth coming from new business we acquired last year. Sales
of generic pharmaceuticals were strong, with recent generic launches
significantly contributing to gross profit growth in the quarter. Our
balance sheet is even stronger after our November bond offering, and we
have good financial flexibility. We are off to a strong start for the
fiscal year, demonstrating the strength of our two growth drivers -
generics and specialty pharmaceuticals."
Results Highlights
- Revenue: Revenue was a record
$19.3 billion in the first quarter of fiscal 2010, an 11.5 percent
increase over the same quarter in the previous fiscal year, with
AmerisourceBergen Drug Corporation revenue increasing 12.9 percent and
AmerisourceBergen Specialty Group revenue up 7.7 percent.
- Gross Profit: Gross profit in
the fiscal 2010 first quarter was $563.4 million, a 15 percent
increase over the year-ago same period, due primarily to increased
revenue and the impact of recent generic pharmaceutical launches,
especially in the Company's Specialty Group. The LIFO charge in the
fiscal 2010 first quarter was $7.8 million compared with a $5.0
million charge in the previous year's first quarter.
- Operating Expenses: For the
first quarter of fiscal 2010, operating expenses were $301.0 million
compared with $292.0 million in the prior fiscal year's first quarter,
a 3 percent increase which was well below the 11.5 percent revenue
increase.
- Operating Income: In the fiscal
2010 first quarter, operating income increased 33 percent to $262.4
million, due primarily to increased revenue growth, the boost in gross
profit and solid expense management.
- Tax Rate: The effective tax rate
for the first quarter of fiscal 2010 was 38.2 percent, compared to
38.6 percent in the previous fiscal year's first quarter. We continue
to expect our annualized effective tax rate to be approximately 38.4
percent.
- Earnings Per Share: Diluted
earnings per share were up 44 percent to $0.52 in the first quarter of
fiscal 2010 compared to $0.36 in the previous fiscal year's first
quarter.
- Shares Outstanding: Diluted
average shares outstanding for the first quarter of fiscal year 2010
were 291.3 million, down nearly 19 million from the previous fiscal
year's first quarter due primarily to share repurchases, net of option
exercises.
Key Ratios
- Gross Margin: Gross profit as a
percentage of revenue increased 8 basis points to 2.91 percent in the
fiscal 2010 first quarter over the same period in the previous year
driven by strong growth in generic sales.
- Operating Expense Ratio:
Operating expenses as a percentage of revenue in the fiscal first
quarter of 2010 were 1.56 percent, down 12 basis points from the same
period in the previous fiscal year. The lower ratio demonstrates the
Company's ability to handle increased business at low incremental
costs.
- Operating Margin: Operating
income as a percentage of revenue increased 22 basis points to 1.36
percent in the fiscal 2010 first quarter compared with the previous
year's first quarter due to improved gross margin and solid expense
management.
Fiscal Year 2010 Expectations
"Based on the exceptional performance in the first fiscal quarter of
2010, the Company is increasing its expectations for diluted earnings
per share for fiscal year 2010 to a range of $1.89 to $1.98, which
represents an increase of 12 percent to 17 percent over the $1.69
diluted earnings per share from continuing operations in fiscal year
2009," said Yost. "Our key assumptions for revenue growth and operating
margin expansion supporting this diluted earnings per share range also
have increased, and the Company now expects revenue growth of between 7
percent and 8 percent and operating margin expansion in the low to mid
single digit basis point range. We continue to expect free cash flow in
the range of $500 million to $575 million, which includes capital
expenditures in the $140 million range. Assumptions also continue to
include the expected repurchase of approximately $350 million of
AmerisourceBergen common shares in fiscal 2010."
Conference Call
The Company will host a conference call to discuss its results at 11:00
a.m. Eastern Standard Time on January 26, 2010. Participating in the
conference call will be: R. David Yost, President and Chief Executive
Officer; and Michael D. DiCandilo, Executive Vice President and Chief
Financial Officer of AmerisourceBergen Corporation.
To access the live conference call via
telephone:
Dial in: The dial-in number for the live call will be 210-234-0010. The
access code for the call is ABC.
To access the live webcast:
Go to the Investor Relations page at http://www.amerisourcebergen.com.
A replay of the telephone call and webcast will be available from 2:30
p.m. January 26, 2010 until 11:59 p.m. February 2, 2010. The Webcast
replay will be available for 30 days.
To access the replay via telephone:
Dial in:
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|
866-427-6406 from within the U.S.
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203-369-0895 from outside the U.S.
|
To access the archived webcast:
Go to the Quarterly Webcasts section on the Investor Relations page at http://www.amerisourcebergen.com.
About AmerisourceBergen
AmerisourceBergen is one of the world's largest pharmaceutical services
companies serving the United States, Canada and selected global markets.
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 and pharmaceutical packaging to reimbursement and
pharmaceutical consulting services. With more than $71 billion in annual
revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and
employs approximately 10,000 people. AmerisourceBergen is ranked #26 on
the Fortune 500 list. For more information, go to www.amerisourcebergen.com.
Forward-Looking Statements
Certain of the statements contained in this press release are
"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 change in circumstances. Among the
factors that could cause actual results to differ materially from those
projected, anticipated or implied are the following: changes in
pharmaceutical market growth rates; the loss of one or more key customer
or supplier relationships; changes in customer mix; customer
delinquencies, defaults or insolvencies; supplier defaults or
insolvencies; changes in pharmaceutical manufacturers' pricing and
distribution policies or practices; adverse resolution of any contract
or other dispute with customers or suppliers; federal and state
government enforcement initiatives to detect and prevent suspicious
orders of controlled substances and the diversion of controlled
substances; qui tam litigation for alleged violations of laws and
regulations governing the marketing, sale and purchase of pharmaceutical
products; changes in U.S. legislation or regulatory action affecting
pharmaceutical product pricing or reimbursement policies, including
under Medicaid and Medicare; changes in regulatory or clinical medical
guidelines and/or labeling for the pharmaceutical products we
distribute, including certain anemia products; price inflation in
branded pharmaceuticals and price deflation in generics; greater or less
than anticipated benefit from launches of the generic versions of
previously patented pharmaceutical products; significant breakdown or
interruption of our information technology systems; our inability to
implement an enterprise resource planning (ERP) system to handle
business and financial processes within AmerisourceBergen Drug
Corporation's operations and our corporate functions without operating
problems and/or cost overruns; success of integration, restructuring or
systems initiatives; interest rate and foreign currency exchange rate
fluctuations; economic, business, competitive and/or regulatory
developments in Canada, the United Kingdom and elsewhere outside of the
United States, including potential changes in Canadian provincial
legislation affecting pharmaceutical product pricing or service fees or
regulatory action by provincial authorities in Canada to lower
pharmaceutical product pricing or service fees; the impact of
divestitures or the acquisition of businesses that do not perform as we
expect or that are difficult for us to integrate or control; our
inability to successfully complete any other transaction that we may
wish to pursue from time to time; changes in tax legislation or adverse
resolution of challenges to our tax positions; increased costs of
maintaining, or reductions in our ability to maintain, adequate
liquidity and financing sources; volatility and deterioration of the
capital and credit markets; and other economic, business, competitive,
legal, tax, regulatory and/or operational factors affecting our business
generally. Certain additional factors that management believes could
cause actual outcomes and results to differ materially from those
described in forward-looking statements are set forth (i) in Item 1A
(Risk Factors) in the Company's Annual Report on Form 10-K for this
Fiscal Year Ended September 30, 2009 and elsewhere in that report and
(ii) in other reports filed by the Company pursuant to the Securities
Exchange Act of 1934.
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|
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AMERISOURCEBERGEN CORPORATION
|
FINANCIAL SUMMARY
|
(In thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
|
Three
|
|
|
|
|
|
|
|
|
Months Ended
|
|
|
|
Months Ended
|
|
|
|
|
|
|
|
|
December 31,
|
|
% of
|
|
December 31,
|
|
% of
|
|
%
|
|
|
|
|
2009
|
|
Revenue
|
|
2008
|
|
Revenue
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$19,335,859
|
|
|
100.00
|
%
|
|
$17,338,377
|
|
|
100.00
|
%
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
18,772,489
|
|
|
|
|
16,848,529
|
|
|
|
|
11.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
563,370
|
|
|
2.91
|
%
|
|
489,848
|
|
|
2.83
|
%
|
|
15.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling and administrative
|
|
280,239
|
|
|
1.45
|
%
|
|
272,026
|
|
|
1.57
|
%
|
|
3.0
|
%
|
|
Depreciation and amortization
|
|
20,797
|
|
|
0.11
|
%
|
|
18,909
|
|
|
0.11
|
%
|
|
10.0
|
%
|
|
Facility consolidations, employee severance and other
|
|
(48
|
)
|
|
-
|
%
|
|
1,029
|
|
|
0.01
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
262,382
|
|
|
1.36
|
%
|
|
197,884
|
|
|
1.14
|
%
|
|
32.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loss
|
|
|
277
|
|
|
-
|
%
|
|
429
|
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
17,267
|
|
|
0.09
|
%
|
|
14,183
|
|
|
0.08
|
%
|
|
21.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
|
244,838
|
|
|
1.27
|
%
|
|
183,272
|
|
|
1.06
|
%
|
|
33.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
93,531
|
|
|
0.48
|
%
|
|
70,743
|
|
|
0.41
|
%
|
|
32.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
151,307
|
|
|
0.78
|
%
|
|
112,529
|
|
|
0.65
|
%
|
|
34.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax
|
|
-
|
|
|
|
|
(1,473
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$151,307
|
|
|
|
|
$111,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$0.53
|
|
|
|
|
$0.36
|
|
|
|
|
47.2
|
%
|
|
Discontinued operations
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
Total
|
|
|
$0.53
|
|
|
|
|
$0.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$0.52
|
|
|
|
|
$0.36
|
|
|
|
|
44.4
|
%
|
|
Discontinued operations
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
Total
|
|
|
$0.52
|
|
|
|
|
$0.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
286,955
|
|
|
|
|
308,594
|
|
|
|
|
|
|
Diluted (1)
|
|
|
291,287
|
|
|
|
|
310,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes the dilutive effect of stock options, restricted stock,
and restricted stock units.
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
December 31,
|
|
September 30,
|
|
|
|
|
2009
|
|
2009
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$979,567
|
|
$1,009,368
|
|
Accounts receivable, net
|
|
3,540,919
|
|
3,916,509
|
|
Merchandise inventories
|
|
5,361,851
|
|
4,972,820
|
|
Prepaid expenses and other
|
|
33,794
|
|
55,056
|
|
Total current assets
|
|
9,916,131
|
|
9,953,753
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
641,909
|
|
619,238
|
Other long-term assets
|
|
|
2,998,231
|
|
2,999,749
|
|
|
|
|
|
|
|
|
Total assets
|
|
$13,556,271
|
|
$13,572,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$8,225,557
|
|
$8,517,162
|
|
Current portion of long-term debt
|
|
593
|
|
1,068
|
|
Other current liabilities
|
|
1,017,298
|
|
961,380
|
|
Total current liabilities
|
|
9,243,448
|
|
9,479,610
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
1,375,256
|
|
1,176,933
|
|
|
|
|
|
|
|
Other long-term liabilities
|
|
196,706
|
|
199,728
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
2,740,861
|
|
2,716,469
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$13,556,271
|
|
$13,572,740
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Three
|
|
Three
|
|
|
Months Ended
|
|
Months Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2009
|
|
2008
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
Net income
|
|
$151,307
|
|
|
$111,056
|
|
Loss from discontinued operations
|
|
-
|
|
|
1,473
|
|
Income from continuing operations
|
|
151,307
|
|
|
112,529
|
|
Adjustments to reconcile income from continuing operations to net
cash used in operating activities
|
|
61,908
|
|
|
44,608
|
|
Changes in operating assets and liabilities
|
|
(254,904
|
)
|
|
(461,252
|
)
|
Net cash used in operating activities - continuing operations
|
|
(41,689
|
)
|
|
(304,115
|
)
|
Net cash used in operating activities - discontinued operations
|
|
-
|
|
|
(251
|
)
|
Net cash used in operating activities
|
|
(41,689
|
)
|
|
(304,366
|
)
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
Capital expenditures
|
|
(42,574
|
)
|
|
(42,344
|
)
|
Proceeds from the sale of PMSI
|
|
-
|
|
|
14,936
|
|
Other
|
|
127
|
|
|
-
|
|
Net cash used in investing activities - continuing operations
|
|
(42,447
|
)
|
|
(27,408
|
)
|
Net cash used in investing activities - discontinued operations
|
|
-
|
|
|
(1,138
|
)
|
Net cash used in investing activities
|
|
(42,447
|
)
|
|
(28,546
|
)
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
Net borrowings
|
|
195,066
|
|
|
27,519
|
|
Purchases of common stock
|
|
(144,626
|
)
|
|
(88,352
|
)
|
Exercises of stock options
|
|
30,416
|
|
|
1,331
|
|
Cash dividends on common stock
|
|
(23,149
|
)
|
|
(15,571
|
)
|
Other
|
|
(3,372
|
)
|
|
788
|
|
Net cash provided by (used in) financing activities
|
|
54,335
|
|
|
(74,285
|
)
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
(29,801
|
)
|
|
(407,197
|
)
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
1,009,368
|
|
|
878,114
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$979,567
|
|
|
$470,917
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
SUMMARY FINANCIAL INFORMATION
|
(dollars in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
2009
|
|
2008
|
|
% Change
|
|
|
|
|
|
|
|
Revenue
|
|
$19,335,859
|
|
|
$17,338,377
|
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical Distribution gross profit
|
|
$561,823
|
|
|
$489,848
|
|
|
14.7
|
%
|
Gain on antitrust litigation settlements
|
|
1,547
|
|
|
-
|
|
|
N/M
|
|
Total gross profit
|
|
$563,370
|
|
|
$489,848
|
|
|
15.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical Distribution operating income
|
|
$260,787
|
|
|
$198,913
|
|
|
31.1
|
%
|
Facility consolidations, employee severance and other
|
|
48
|
|
|
(1,029
|
)
|
|
N/M
|
|
Gain on antitrust litigation settlements
|
|
1,547
|
|
|
-
|
|
|
N/M
|
|
Total operating income
|
|
$262,382
|
|
|
$197,884
|
|
|
32.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical Distribution
|
|
|
|
|
|
|
Gross profit
|
|
2.91
|
%
|
|
2.83
|
%
|
|
|
Operating expenses
|
|
1.56
|
%
|
|
1.68
|
%
|
|
|
Operating income *
|
|
1.35
|
%
|
|
1.15
|
%
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation
|
|
|
|
|
|
|
Gross profit
|
|
2.91
|
%
|
|
2.83
|
%
|
|
|
Operating expenses
|
|
1.56
|
%
|
|
1.68
|
%
|
|
|
Operating income *
|
|
1.36
|
%
|
|
1.14
|
%
|
|
|
|
|
|
|
|
|
|
* Calculated as a percentage of revenue. May or may not equal the gross
profit % less the operating expenses % due to rounding.
SOURCE: AmerisourceBergen Corporation
AmerisourceBergen Corporation
Michael N. Kilpatric, 610-727-7118
mkilpatric@amerisourcebergen.com