Company Increases Fiscal Year 2011 EPS Guidance Range to $2.41 to
$2.49
VALLEY FORGE, Pa., Apr 28, 2011 (BUSINESS WIRE) --
AmerisourceBergen Corporation (NYSE:ABC) today reported that in its
fiscal year 2011 second quarter, ended March 31, 2011, diluted earnings
per share were $0.77, a 22 percent increase. Revenue in the quarter was
$19.8 billion, up 2 percent. The Company also increased its expectations
for fiscal year 2011 diluted earnings per share to a range of $2.41 to
$2.49 from its previous range of $2.31 to $2.41. All the results are
presented in accordance with U.S. generally accepted accounting
principles (GAAP).
Fiscal Second Quarter Highlights
-
Revenue of $19.8 billion, up 2.4 percent.
-
Diluted earnings per share of $0.77, a 22.2 percent increase.
-
Gross margin of 3.48 percent, up 31 basis points.
-
Operating margin of 1.85 percent, up 24 basis points.
-
Cash Flow from Operations of $676 million.
Fiscal First Six Months Highlights
-
Revenue of $39.6 billion, up 2.6 percent.
-
Diluted earnings per share of $1.34, a 16.5 percent increase.
-
Gross margin of 3.20 percent, a 16 basis point increase.
-
Operating margin of 1.62 percent, a 14 basis point increase.
-
Cash Flow from Operations of $577 million.
"In the March quarter, we delivered outstanding performance on top of
very strong performance last year," said R. David Yost,
AmerisourceBergen Chief Executive Officer. "During the quarter, we
announced that I will retire from the Company on July 1, 2011, my 64th
birthday, and that Steve Collis, currently President and Chief Operating
Officer, will succeed me as CEO on that date. The transition is
progressing smoothly, and I have the utmost confidence that with Steve's
leadership, AmerisourceBergen will take full advantage of the
opportunities that lie ahead."
"We are extremely pleased with our performance in the first half of our
fiscal year," said Collis. "Solid results in all of our business units,
combined with better than expected contributions from specialty generics
drove results ahead of expectations. Our disciplined working capital
management has further strengthened our balance sheet, and we continue
to have excellent financial flexibility. Our results continue to
demonstrate the strength of our two growth drivers - generics and
specialty pharmaceuticals."
Results Highlights
- Revenue: Revenue was $19.8 billion in the
second quarter of fiscal 2011, a 2.4 percent increase over the same
quarter in the previous fiscal year, driven by a 4 percent increase in
AmerisourceBergen Drug Corporation (ABDC) revenue and offset by the
expected decline in AmerisourceBergen Specialty Group (ABSG) revenue,
which was down 2 percent. The growth in ABDC revenue was driven by
market growth and the growth of certain of our large customers. The
decline in ABSG revenue was primarily due to the previously disclosed
September 2010 discontinuation of an $800 million annual revenue
contract in its third party logistics business.
- Gross Profit: Gross profit in the fiscal
2011 second quarter was $687.3 million, a 12.3 percent increase over
the year-ago same period, with a larger than expected contribution
from specialty generics driving the majority of the increase. In
addition, growth in non-specialty generic revenue and increased
contributions from fee-for-service agreements with manufacturers added
to the increase. Gross profit as a percentage of revenue increased 31
basis points to 3.48 percent over the same period in the previous
year. The LIFO charge in the fiscal 2011 second quarter was $13.5
million compared with a $10.7 million charge in the previous year's
second quarter.
- Operating Expenses: For the second
quarter of fiscal 2011, operating expenses were $322.1 million
compared with $300.8 million in the prior fiscal year's second
quarter, a 7.1 percent increase. The increase in operating expenses
was due to the expected increase in information technology costs, an
increase in bad debt expense, and an increase in incentive
compensation expense. Operating expenses as a percentage of revenue in
the fiscal second quarter of 2011 were 1.63 percent, up 7 basis points
from the same period in the previous fiscal year.
- Operating Income: In the fiscal 2011
second quarter, operating income increased 17.4 percent to $365.2
million, due to the increase in gross profit. Operating income as a
percentage of revenue increased 24 basis points to 1.85 percent in the
period compared with the previous year's second quarter.
- Tax Rate: The effective tax rate for the
second quarter of fiscal 2011 was 38.1 percent, compared to 37.9
percent in the previous fiscal year's second quarter. We continue to
expect our normalized effective tax rate to be approximately 38.4
percent.
- Earnings Per Share: Diluted earnings per
share were up 22.2 percent to $0.77 in the second quarter of fiscal
2011 compared to $0.63 in the previous fiscal year's second quarter.
Earnings per share growth exceeded the 18.4% growth in net income due
to the reduction in diluted average shares outstanding.
- Shares Outstanding: Diluted average
shares outstanding for the second quarter of fiscal year 2011 were
279.8 million, down 7.4 million shares from the previous fiscal year's
second quarter due primarily to share repurchases, net of option
exercises over the last twelve months.
Fiscal Year 2011 Expectations
"Looking ahead, the Company now expects diluted earnings per share in
fiscal year 2011 to be in the range of $2.41 to $2.49," said R. David
Yost, AmerisourceBergen Chief Executive Officer. "The key assumptions
supporting the diluted earnings per share range for fiscal year 2011
are: we continue to expect revenue growth of between 2 percent and 4
percent; we now expect operating margin expansion in the mid to high
single digit basis points range; and free cash flow is now expected to
be in the high end of the range of $625 million to $700 million, which
includes capital expenditures now expected to be in the $175 million
range. We have increased our share repurchase expectation for fiscal
year 2011 to $598 million from the original expectation of $400 million
for the year, subject to market conditions."
Conference Call
The Company will host a conference call to discuss its results at 11:00
a.m. Eastern Daylight Time on April 28, 2011. Participating in the
conference call will be: R. David Yost, Chief Executive Officer; Steven
H. Collis, President and Chief Operating Officer; and Michael D.
DiCandilo, Executive Vice President and Chief Financial Officer.
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. April 28, 2011 until 11:59 p.m. May 5, 2011. The Webcast replay
will be available for 30 days.
To access the replay via telephone:
|
|
|
Dial in:
|
|
800-468-0320 from within the U.S.
|
|
|
203-369-3285 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 healthcare providers and pharmaceutical manufacturers 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 $79 billion in annualized
revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and
employs approximately 10,000 people. AmerisourceBergen is ranked #24 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; quitam litigation for alleged violations of
fraud and abuse laws and regulations and/or any other laws and
regulations governing the marketing, sale and purchase of pharmaceutical
products or any related litigation, including shareholder derivative
lawsuits; changes in federal and state 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
continue to implement an enterprise resource planning (ERP) system to
handle business and financial processes and transactions (including
processes and transactions relating to our customers and suppliers) of
AmerisourceBergen Drug Corporation operations and our corporate
functions as intended without functional problems, unanticipated delays
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 changes and/or 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 and 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 the
Fiscal Year Ended September 30, 2010 and elsewhere in that report and
(ii) in other reports filed by the Company pursuant to the Securities
Exchange Act of 1934.
|
AMERISOURCEBERGEN CORPORATION
|
FINANCIAL SUMMARY
|
(In thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
|
Three
|
|
|
|
|
|
|
Months Ended
|
|
|
|
Months Ended
|
|
|
|
|
|
|
March 31,
|
|
% of
|
|
March 31,
|
|
% of
|
|
%
|
|
|
|
2011
|
|
|
Revenue
|
|
|
2010
|
|
|
Revenue
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
19,760,257
|
|
|
100.00
|
%
|
|
$
|
19,300,627
|
|
|
100.00
|
%
|
|
2.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
19,072,921
|
|
|
|
|
|
18,688,559
|
|
|
|
|
2.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
687,336
|
|
|
3.48
|
%
|
|
|
612,068
|
|
|
3.17
|
%
|
|
12.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling and administrative
|
|
|
296,132
|
|
|
1.50
|
%
|
|
|
279,491
|
|
|
1.45
|
%
|
|
6.0
|
%
|
Depreciation and amortization
|
|
|
25,955
|
|
|
0.13
|
%
|
|
|
20,687
|
|
|
0.11
|
%
|
|
25.5
|
%
|
Facility consolidations, employee severance and other
|
|
|
-
|
|
|
-
|
%
|
|
|
(37
|
)
|
|
-
|
%
|
|
|
Intangible asset impairments
|
|
|
-
|
|
|
-
|
%
|
|
|
700
|
|
|
-
|
%
|
|
|
Total operating expenses
|
|
|
322,087
|
|
|
1.63
|
%
|
|
|
300,841
|
|
|
1.56
|
%
|
|
7.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
365,249
|
|
|
1.85
|
%
|
|
|
311,227
|
|
|
1.61
|
%
|
|
17.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) loss
|
|
|
(142
|
)
|
|
-
|
%
|
|
|
268
|
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
19,056
|
|
|
0.10
|
%
|
|
|
19,279
|
|
|
0.10
|
%
|
|
-1.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
346,335
|
|
|
1.75
|
%
|
|
|
291,680
|
|
|
1.51
|
%
|
|
18.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
131,954
|
|
|
0.67
|
%
|
|
|
110,672
|
|
|
0.57
|
%
|
|
19.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
214,381
|
|
|
1.08
|
%
|
|
$
|
181,008
|
|
|
0.94
|
%
|
|
18.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.78
|
|
|
|
|
$
|
0.64
|
|
|
|
|
21.9
|
%
|
Diluted
|
|
$
|
0.77
|
|
|
|
|
$
|
0.63
|
|
|
|
|
22.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
274,319
|
|
|
|
|
|
281,926
|
|
|
|
|
|
Diluted (1)
|
|
|
279,766
|
|
|
|
|
|
287,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes the dilutive effect of stock options, restricted stock,
and restricted stock units.
|
|
|
AMERISOURCEBERGEN CORPORATION
|
FINANCIAL SUMMARY
|
(In thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
|
|
|
|
Six
|
|
|
|
|
|
|
Months Ended
|
|
|
|
Months Ended
|
|
|
|
|
|
|
March 31,
|
|
% of
|
|
March 31,
|
|
% of
|
|
%
|
|
|
|
2011
|
|
|
Revenue
|
|
|
2010
|
|
|
Revenue
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
39,648,866
|
|
|
100.00
|
%
|
|
$
|
38,636,486
|
|
|
100.00
|
%
|
|
2.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
38,381,298
|
|
|
|
|
|
37,461,048
|
|
|
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
1,267,568
|
|
|
3.20
|
%
|
|
|
1,175,438
|
|
|
3.04
|
%
|
|
7.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling and administrative
|
|
|
574,165
|
|
|
1.45
|
%
|
|
|
559,730
|
|
|
1.45
|
%
|
|
2.6
|
%
|
Depreciation and amortization
|
|
|
51,388
|
|
|
0.13
|
%
|
|
|
41,484
|
|
|
0.11
|
%
|
|
23.9
|
%
|
Facility consolidations, employee severance and other
|
|
|
-
|
|
|
-
|
%
|
|
|
(85
|
)
|
|
-
|
%
|
|
|
Intangible asset impairments
|
|
|
-
|
|
|
-
|
%
|
|
|
700
|
|
|
-
|
%
|
|
|
Total operating expenses
|
|
|
625,553
|
|
|
1.58
|
%
|
|
|
601,829
|
|
|
1.56
|
%
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
642,015
|
|
|
1.62
|
%
|
|
|
573,609
|
|
|
1.48
|
%
|
|
11.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) loss
|
|
|
(1,809
|
)
|
|
-
|
%
|
|
|
545
|
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
38,200
|
|
|
0.10
|
%
|
|
|
36,546
|
|
|
0.09
|
%
|
|
4.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
605,624
|
|
|
1.53
|
%
|
|
|
536,518
|
|
|
1.39
|
%
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
230,743
|
|
|
0.58
|
%
|
|
|
204,203
|
|
|
0.53
|
%
|
|
13.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
374,881
|
|
|
0.95
|
%
|
|
$
|
332,315
|
|
|
0.86
|
%
|
|
12.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.36
|
|
|
|
|
$
|
1.17
|
|
|
|
|
16.2
|
%
|
Diluted
|
|
$
|
1.34
|
|
|
|
|
$
|
1.15
|
|
|
|
|
16.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
274,980
|
|
|
|
|
|
284,478
|
|
|
|
|
|
Diluted (1)
|
|
|
280,247
|
|
|
|
|
|
289,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes the dilutive effect of stock options, restricted stock,
and restricted stock units.
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
March 31,
|
|
September 30,
|
|
|
2011
|
|
2010
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,912,436
|
|
$
|
1,658,182
|
Accounts receivable, net
|
|
|
3,802,240
|
|
|
3,827,484
|
Merchandise inventories
|
|
|
5,195,946
|
|
|
5,210,098
|
Prepaid expenses and other
|
|
|
45,624
|
|
|
52,586
|
Total current assets
|
|
|
10,956,246
|
|
|
10,748,350
|
|
|
|
|
|
Property and equipment, net
|
|
|
755,155
|
|
|
711,712
|
Other long-term assets
|
|
|
2,969,615
|
|
|
2,974,781
|
|
|
|
|
|
Total assets
|
|
$
|
14,681,016
|
|
$
|
14,434,843
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
8,909,481
|
|
$
|
8,833,285
|
Current portion of long-term debt
|
|
|
278
|
|
|
422
|
Other current liabilities
|
|
|
1,040,413
|
|
|
1,072,637
|
Total current liabilities
|
|
|
9,950,172
|
|
|
9,906,344
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
1,342,581
|
|
|
1,343,158
|
|
|
|
|
|
Other long-term liabilities
|
|
|
255,233
|
|
|
231,044
|
|
|
|
|
|
Stockholders' equity
|
|
|
3,133,030
|
|
|
2,954,297
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
14,681,016
|
|
$
|
14,434,843
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
|
|
Six
|
|
|
Months Ended
|
|
Months Ended
|
|
|
March 31,
|
|
March 31,
|
|
|
|
2011
|
|
|
|
2010
|
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
Net income
|
|
$
|
374,881
|
|
|
$
|
332,315
|
|
Adjustments to reconcile net income to net cash provided by
operating activities
|
|
|
141,486
|
|
|
|
128,795
|
|
Changes in operating assets and liabilities
|
|
|
60,837
|
|
|
|
(114,717
|
)
|
Net cash provided by operating activities
|
|
|
577,204
|
|
|
|
346,393
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
Capital expenditures
|
|
|
(93,773
|
)
|
|
|
(88,037
|
)
|
Other
|
|
|
-
|
|
|
|
134
|
|
Net cash used in investing activities
|
|
|
(93,773
|
)
|
|
|
(87,903
|
)
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
Net (repayments) borrowings
|
|
|
(1,905
|
)
|
|
|
177,518
|
|
Purchases of common stock
|
|
|
(255,120
|
)
|
|
|
(255,199
|
)
|
Exercises of stock options
|
|
|
89,369
|
|
|
|
64,496
|
|
Cash dividends on common stock
|
|
|
(55,271
|
)
|
|
|
(45,754
|
)
|
Debt issuance costs and other
|
|
|
(6,250
|
)
|
|
|
(9,047
|
)
|
Net cash used in financing activities
|
|
|
(229,177
|
)
|
|
|
(67,986
|
)
|
|
|
|
|
|
Increase in cash and cash equivalents
|
|
|
254,254
|
|
|
|
190,504
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
1,658,182
|
|
|
|
1,009,368
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,912,436
|
|
|
$
|
1,199,872
|
|

SOURCE: AmerisourceBergen Corporation
AmerisourceBergen Corporation
Barbara Brungess, 610-727-7199
bbrungess@amerisourcebergen.com