Company Reiterates Fiscal Year 2012 EPS Guidance Range of $2.74 to
$2.84
VALLEY FORGE, Pa., Apr 26, 2012 (BUSINESS WIRE) --AmerisourceBergen Corporation (NYSE:ABC) today reported that in its
fiscal year 2012 second quarter, ended March 31, 2012, diluted earnings
per share were $0.81, a 5.2 percent increase. Revenue in the quarter was
$20.1 billion, up 1.6 percent. The Company also reiterated its
expectations for fiscal year 2012 diluted earnings per share in the
range of $2.74 to $2.84. All the results are presented in accordance
with U.S. generally accepted accounting principles (GAAP).
Fiscal Second Quarter Highlights
-
Revenue of $20.1 billion, up 1.6 percent.
-
Diluted earnings per share of $0.81, a 5.2 percent increase.
-
Operating expense ratio of 1.63 percent, flat.
-
Operating income of $368.1 million, up 0.8%, net of $9.0 million in
employee severance and acquisition related transaction costs.
-
Cash Flow from Operations of $236.4 million.
-
Share repurchases of $200.5 million.
Fiscal First Six Months Highlights
-
Revenue of $40.4 billion, a 2.0 percent increase.
-
Diluted earnings per share of $1.42, a 6.0 percent increase.
-
Operating expense ratio of 1.57 percent, a 1 basis point decline.
-
Operating income of $653.0 million, a 1.7 percent increase.
-
Cash Flow from Operations of $668.1 million.
-
Share repurchases of $328.5 million.
"I am pleased to report very solid results for our second fiscal quarter
and for the first half of our fiscal year," said Steven H. Collis,
AmerisourceBergen President and Chief Executive Officer. "We overcame a
challenging comparison with the prior year, we continued to demonstrate
tremendous expense and working capital discipline, and our balance sheet
remains strong, giving us outstanding financial flexibility. The
integration of our recent acquisitions is progressing well, and we are
on track to meet our objectives for the year. We expect to complete our
$520 million acquisition of World Courier Group by the end of April, and
we are excited to welcome their 2,500 associates to AmerisourceBergen,
and to explore the possibilities of extending our capabilities in select
international markets."
Results Highlights
-
Revenue: Revenue was $20.1 billion in the
second quarter of fiscal 2012, a 1.6 percent increase over the same
quarter in the previous fiscal year, driven by a 6 percent increase in
AmerisourceBergen Specialty Group (ABSG) revenue. As expected,
AmerisourceBergen Drug Corporation (ABDC) revenue was relatively flat
in comparison to the prior year quarter. Strong performance in third
party logistics and our vaccine and physician office distribution
business in ABSG, and solid performance in the institutional segment
in ABDC was offset by the previously announced loss of a large retail
customer. Recent acquisitions, particularly TheraCom, contributed 0.9
percent of revenue growth in the quarter.
-
Gross Profit: Gross profit in the fiscal
2012 second quarter was $695.1 million, a 1.1 percent increase over
the year-ago same period, driven by solid performance in generic
pharmaceuticals and contributions from our recent acquisitions, which
offset a reduced contribution from specialty generics compared to the
same period in the prior year. Gross profit as a percentage of revenue
decreased 2 basis points to 3.46 percent over the same period in the
previous year. The LIFO charge in the fiscal 2012 second quarter was
$3.6 million compared with a $13.5 million charge in the previous
year's second quarter.
-
Operating Expenses: For the second
quarter of fiscal 2012, operating expenses were $327.0 million
compared with $322.1 million in the prior fiscal year's second
quarter, a 1.5 percent increase. The increase in operating expenses
was driven by $9.0 million in employee severance and
acquisition-related transaction costs, the operating expenses of our
recently acquired companies, and increased depreciation and
amortization expenses, which was offset in large part by a significant
improvement in distribution, selling and administrative expenses.
Operating expenses as a percentage of revenue in the fiscal second
quarter of 2012 were 1.63 percent, which was flat compared to the same
period in the previous fiscal year.
-
Operating Income: In the fiscal 2012
second quarter, operating income increased 0.8 percent to $368.1
million, due to the increase in gross profit. Operating income as a
percentage of revenue decreased 2 basis points to 1.83 percent in the
period compared with the previous year's second quarter.
-
Tax Rate: The effective tax rate for the
second quarter of fiscal 2012 was 38.4 percent, compared to 38.1
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 5.2 percent to $0.81 in the second quarter of fiscal
2012 compared to $0.77 in the previous fiscal year's second quarter.
While net income decreased 1.1%, earnings per share growth was
achieved due to the reduction in diluted average shares outstanding.
-
Shares Outstanding: Diluted average
shares outstanding for the second quarter of fiscal year 2012 were
262.4 million, down 17.4 million shares from the previous fiscal
year's second quarter due primarily to share repurchases, net of
option exercises over the last twelve months.
Update on Medco Contract
Following the closing of the merger of Express Scripts, Inc. and Medco
Health Solutions, Inc. in April 2012, we amended our existing Medco
agreement to provide for the contract to end upon the award and
implementation of one or more new pharmaceutical distribution agreements
for the newly combined business. Express Scripts has issued an RFP for
the combined business, and anticipates that the new contract or
contracts will begin on October 1, 2012. We will participate fully in
the competitive RFP process, and it is our intent to pursue the
opportunity to retain or grow the business under a new contract. The
amendment to our existing agreement will have no impact on our fiscal
2012.
Fiscal Year 2012 Expectations
"Looking ahead, the Company continues to expect diluted earnings per
share in fiscal year 2012 to be in the range of $2.74 to $2.84," said
Steven H. Collis, AmerisourceBergen President and Chief Executive
Officer. "We continue to expect flat to modest revenue growth; and we
now expect operating margin growth in the high single-digit basis points
range. We have increased our expectation for free cash flow to be in the
range of $800 million to $900 million, which includes capital
expenditures now expected to be in the $200 million range. Finally, we
have increased our expectations for share repurchases, and we now expect
to spend approximately $500 million to repurchase our common shares in
fiscal year 2012, subject to market conditions."
Conference Call
The Company will host a conference call to discuss its results at 11:00
a.m. Eastern Standard Time on April 26, 2012. Participating in the
conference call will be: Steven H. Collis, President and Chief Executive
Officer; and Tim G. Guttman, Vice President, Corporate Controller, and
Acting Chief Financial Officer.
To access the live conference call via telephone:
Dial in: The dial-in number for the live call will be 612-332-0530. No
access code is needed.
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 26, 2012 until 11:59 p.m. May 3, 2012. The Webcast replay
will be available for 30 days.
To access the telephone replay from within the US, dial 800-475-6701.
From outside the US, dial 320-365-3844. The access code for the replay
is 243852.
To access the archived webcast:
Go to the Quarterly Webcasts section on the Investor Relations page at http://www.amerisourcebergen.com.
Upcoming Conferences:
AmerisourceBergen management will be presenting at the Bank of America
Merrill Lynch 2012 Healthcare Conference in Las Vegas, Nevada on May 17,
2012, and at the Goldman Sachs 33rd Annual Global Healthcare
Conference on June 6, 2012 in Rancho Palos Verde, California.
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 more than $80 billion in annual
revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and
employs approximately 11,000 people. AmerisourceBergen is ranked #27 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 fraud
and abuse laws and regulations and/or any other laws and regulations
governing the marketing, sale and purchase of pharmaceutical products or
services and 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 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 laws or legislative initiatives that could adversely affect our
tax positions and/or our tax liabilities 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, 2011 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
|
|
%
|
|
|
2012
|
|
Revenue
|
|
2011
|
|
Revenue
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$20,071,271
|
|
|
100.00
|
%
|
|
$19,760,257
|
|
|
100.00
|
%
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
19,376,146
|
|
|
|
|
19,072,921
|
|
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
695,125
|
|
|
3.46
|
%
|
|
687,336
|
|
|
3.48
|
%
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling and administrative
|
|
284,638
|
|
|
1.42
|
%
|
|
296,132
|
|
|
1.50
|
%
|
|
-3.9
|
%
|
Depreciation and amortization
|
|
33,359
|
|
|
0.17
|
%
|
|
25,955
|
|
|
0.13
|
%
|
|
28.5
|
%
|
Employee severance, litigation and other (1)
|
|
9,027
|
|
|
0.04
|
%
|
|
-
|
|
|
-
|
%
|
|
|
Total operating expenses
|
|
327,024
|
|
|
1.63
|
%
|
|
322,087
|
|
|
1.63
|
%
|
|
1.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
368,101
|
|
|
1.83
|
%
|
|
365,249
|
|
|
1.85
|
%
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
(131
|
)
|
|
-
|
%
|
|
(142
|
)
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
23,906
|
|
|
0.12
|
%
|
|
19,056
|
|
|
0.10
|
%
|
|
25.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
344,326
|
|
|
1.72
|
%
|
|
346,335
|
|
|
1.75
|
%
|
|
-0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
132,221
|
|
|
0.66
|
%
|
|
131,954
|
|
|
0.67
|
%
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$212,105
|
|
|
1.06
|
%
|
|
$214,381
|
|
|
1.08
|
%
|
|
-1.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$0.82
|
|
|
|
|
$0.78
|
|
|
|
|
5.1
|
%
|
Diluted
|
|
$0.81
|
|
|
|
|
$0.77
|
|
|
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
258,162
|
|
|
|
|
274,319
|
|
|
|
|
|
Diluted (2)
|
|
262,363
|
|
|
|
|
279,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes $6.1 million of employee severance costs and $2.9
million of acquisition costs related to business combinations.
|
|
(2) 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
|
|
%
|
|
|
2012
|
|
Revenue
|
|
2011
|
|
Revenue
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$40,431,916
|
|
|
100.00
|
%
|
|
$39,648,866
|
|
|
100.00
|
%
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
39,143,698
|
|
|
|
|
38,381,298
|
|
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
1,288,218
|
|
|
3.19
|
%
|
|
1,267,568
|
|
|
3.20
|
%
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling and administrative
|
|
558,503
|
|
|
1.38
|
%
|
|
574,165
|
|
|
1.45
|
%
|
|
-2.7
|
%
|
Depreciation and amortization
|
|
64,114
|
|
|
0.16
|
%
|
|
51,388
|
|
|
0.13
|
%
|
|
24.8
|
%
|
Employee severance, litigation and other (1)
|
|
12,586
|
|
|
0.03
|
%
|
|
-
|
|
|
-
|
%
|
|
|
Total operating expenses
|
|
635,203
|
|
|
1.57
|
%
|
|
625,553
|
|
|
1.58
|
%
|
|
1.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
653,015
|
|
|
1.62
|
%
|
|
642,015
|
|
|
1.62
|
%
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
(132
|
)
|
|
-
|
%
|
|
(1,809
|
)
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
46,497
|
|
|
0.12
|
%
|
|
38,200
|
|
|
0.10
|
%
|
|
21.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
606,650
|
|
|
1.50
|
%
|
|
605,624
|
|
|
1.53
|
%
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
232,429
|
|
|
0.57
|
%
|
|
230,743
|
|
|
0.58
|
%
|
|
0.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$374,221
|
|
|
0.93
|
%
|
|
$374,881
|
|
|
0.95
|
%
|
|
-0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$1.45
|
|
|
|
|
$1.36
|
|
|
|
|
6.6
|
%
|
Diluted
|
|
$1.42
|
|
|
|
|
$1.34
|
|
|
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
258,316
|
|
|
|
|
274,980
|
|
|
|
|
|
Diluted (2)
|
|
262,729
|
|
|
|
|
280,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes $6.1 million of employee severance costs and $6.5
million of acquisition costs related to business combinations.
|
|
(2) 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,
|
|
|
2012
|
|
2011
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,327,094
|
|
$
|
1,825,990
|
Accounts receivable, net
|
|
|
3,868,647
|
|
|
3,837,203
|
Merchandise inventories
|
|
|
5,354,338
|
|
|
5,466,534
|
Prepaid expenses and other
|
|
|
53,562
|
|
|
87,896
|
Total current assets
|
|
|
11,603,641
|
|
|
11,217,623
|
|
|
|
|
|
Property and equipment, net
|
|
|
803,419
|
|
|
772,916
|
Other long-term assets
|
|
|
3,237,976
|
|
|
2,992,132
|
|
|
|
|
|
Total assets
|
|
$
|
15,645,036
|
|
$
|
14,982,671
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
9,249,766
|
|
$
|
9,202,115
|
Current portion of long-term debt
|
|
|
392,164
|
|
|
392,089
|
Other current liabilities
|
|
|
1,273,070
|
|
|
1,260,916
|
Total current liabilities
|
|
|
10,915,000
|
|
|
10,855,120
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
1,489,971
|
|
|
972,863
|
|
|
|
|
|
Other long-term liabilities
|
|
|
293,590
|
|
|
287,830
|
|
|
|
|
|
Stockholders' equity
|
|
|
2,946,475
|
|
|
2,866,858
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
15,645,036
|
|
$
|
14,982,671
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Six
|
|
Six
|
|
|
Months Ended
|
|
Months Ended
|
|
|
March 31,
|
|
March 31,
|
|
|
2012
|
|
2011
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
Net income
|
|
$374,221
|
|
|
$374,881
|
|
Adjustments to reconcile net income to net cash provided by
operating activities
|
|
130,490
|
|
|
141,486
|
|
Changes in operating assets and liabilities
|
|
163,413
|
|
|
60,837
|
|
Net cash provided by operating activities
|
|
668,124
|
|
|
577,204
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
Capital expenditures
|
|
(88,198
|
)
|
|
(93,773
|
)
|
Cost of acquired companies, net of cash acquired
|
|
(257,658
|
)
|
|
-
|
|
Net cash used in investing activities
|
|
(345,856
|
)
|
|
(93,773
|
)
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
Net borrowings (repayments)
|
|
514,208
|
|
|
(1,905
|
)
|
Purchases of common stock
|
|
(328,504
|
)
|
|
(255,120
|
)
|
Exercises of stock options
|
|
71,084
|
|
|
89,369
|
|
Cash dividends on common stock
|
|
(67,429
|
)
|
|
(55,271
|
)
|
Debt issuance costs and other
|
|
(10,523
|
)
|
|
(6,250
|
)
|
Net cash provided by (used in) financing activities
|
|
178,836
|
|
|
(229,177
|
)
|
|
|
|
|
|
Increase in cash and cash equivalents
|
|
501,104
|
|
|
254,254
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
1,825,990
|
|
|
1,658,182
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$2,327,094
|
|
|
$1,912,436
|
|
|
|
|
|
|
|
|
SOURCE: AmerisourceBergen Corporation
AmerisourceBergen Corporation
Barbara Brungess,
610-727-7199
[email protected]