Raises Expectations for Fiscal 2015 Adjusted Diluted EPS from
Continuing Operations to be in the range of $4.45 to $4.55, Excluding
the Impact of the MWI Veterinary Supply, Inc. Transaction
VALLEY FORGE, Pa.--(BUSINESS WIRE)--Jan. 28, 2015--
AmerisourceBergen Corporation (NYSE:ABC) today reported that in its
fiscal year 2015 first quarter ended December 31, 2014, adjusted diluted
earnings per share from continuing operations increased 42.5 percent to
$1.14. Revenue increased 15.1 percent to $33.6 billion in the quarter.
On the basis of U.S. generally accepted accounting principles (GAAP),
diluted loss per share from continuing operations was $0.91 for the
December quarter of fiscal 2015. In the tables that follow, we present
our GAAP results as well as a reconciliation of GAAP (loss) income from
continuing operations to adjusted non-GAAP income from continuing
operations.
“We are off to a great start in fiscal 2015, with excellent financial
and operational performance across our businesses,” said Steven H.
Collis, AmerisourceBergen President and Chief Executive Officer. “We
have also made important progress against our strategic objectives by
signing a definitive agreement to acquire MWI Veterinary Supply, Inc.
(MWI) earlier this month. We continue to expect the transaction to close
in the March quarter, and we are very excited about the opportunities
that lie ahead in our core businesses and with MWI in the remainder of
this fiscal year and beyond.”
The comments below compare adjusted results from continuing operations,
which exclude:
-
Warrant expense;
-
Gains on antitrust litigation settlements;
-
LIFO expense;
-
Acquisition related intangibles amortization; and
-
Employee severance, litigation, and other expenses.
In addition, we calculate our adjusted earnings per share for each
period using a diluted weighted average share count, which excludes the
accounting dilution resulting from the impact of the unexercised equity
warrants, and the impact from the shares repurchased under our special
$650 million share repurchase program. Solely in connection with the
special share repurchase program, we issued $600 million of 1.15% senior
notes due in May 2017. The interest expense incurred relating to this
borrowing is also excluded from the non-GAAP presentation.
Summary of Adjusted Quarterly Results
-
Revenue: In the first quarter of fiscal
2015, revenue was $33.6 billion, up 15.1 percent compared to the same
quarter in the previous fiscal year, reflecting a 15 percent increase
in AmerisourceBergen Drug Corporation (ABDC) revenue, and a 26 percent
increase in AmerisourceBergen Specialty Group (ABSG) revenue.
-
Gross Profit: Gross profit in the fiscal
2015 first quarter was $896.3 million, a 23.7 percent increase over
the same period in the previous year, driven by strong revenue growth
in brand and generic pharmaceuticals in ABDC, and strong revenue
growth in ABSG. Gross profit as a percentage of revenue increased 19
basis points to 2.67 percent.
-
Operating Expenses: In the first quarter
of fiscal 2015, operating expenses were $460.8 million, up 14.6
percent over the same period in the last fiscal year. The increase in
operating expenses in the quarter was driven by additional costs to
support the increase in revenue growth. Operating expenses as a
percentage of revenue in the fiscal 2015 first quarter were 1.37
percent compared with 1.38 percent for the same period in the previous
fiscal year.
-
Operating Income: In the fiscal 2015
first quarter, operating income of $435.6 million was up 35.0 percent
versus the prior year, as our gross profit growth exceeded our
operating expense growth. Operating income as a percentage of revenue
increased 19 basis points to 1.30 percent in the fiscal 2015 first
quarter compared to the previous year’s first quarter.
-
Tax Rate: The effective tax rate for the
first quarter of fiscal 2015 was 37.9 percent, down from 38.2 percent
in the previous fiscal year’s first quarter. Going forward, we
continue to expect our annualized effective tax rate to be about 37
percent for the full year.
-
Earnings Per Share: Diluted earnings per
share from continuing operations were up 42.5 percent to $1.14 in the
first quarter of fiscal year 2015 compared to $0.80 in the previous
fiscal year’s first quarter, driven by the increase in operating
income.
-
Shares Outstanding: Diluted weighted
average shares outstanding for the first quarter of fiscal year 2015
were 229.3 million, a 2.6 percent decrease versus the prior year as
share repurchases more than offset option exercises.
Segment Discussion
The Pharmaceutical Distribution segment includes both AmerisourceBergen
Drug Corporation and AmerisourceBergen Specialty Group. Other includes
AmerisourceBergen Consulting Services and World Courier.
Pharmaceutical Distribution Segment
In the first fiscal quarter of 2015, Pharmaceutical Distribution
revenues were $33.0 billion, an increase of 15 percent compared to the
same quarter in the prior year. ABDC revenues increased 15 percent, due
primarily to the onboarding of the new Walgreens generic pharmaceuticals
business, strong sales of products that treat hepatitis C, and solid
organic sales growth in our independent pharmacy, health systems, and
alternate site customers. ABSG revenues increased 26 percent, which was
driven by strong performance in our blood products, vaccine and
physician office distribution businesses, the impact of manufacturer
shifts of certain oncology products from full line distribution to
specialty distribution, strong performance in our third party logistics
business, and an increase in sales to community oncology practices.
Intrasegment revenues between ABDC and ABSG have been eliminated in the
presentation of total Pharmaceutical Distribution revenue. Total
intrasegment revenues were $1.6 billion and $976.8 million in the
quarters ended December 31, 2014 and 2013, respectively.
Operating income of $390.4 million in the December quarter of fiscal
2015 increased 36 percent compared to the same period in the previous
year driven by the strong revenue growth in both ABDC and ABSG.
Other
Revenues in Other were $696.0 million in the first quarter of fiscal
2015, an increase of 15 percent over the same period in the prior year.
Operating income increased 26 percent to $45.2 million in the first
quarter of fiscal 2015, driven by strong performance in our consulting
businesses and in World Courier.
Fiscal Year 2015 Expectations
Our updated expectations for financial performance in fiscal 2015,
excluding the impact of the MWI transaction, include:
-
Adjusted diluted earnings per share from continuing operations in the
range of $4.45 to $4.55, a 12 percent to 15 percent increase over
fiscal 2014, and an increase over prior guidance of $4.36 to $4.50;
-
Revenue growth in the range of 10 percent to 11 percent;
-
Adjusted operating income growth in the 9 percent to 11 percent range;
-
Flat adjusted operating margin;
-
Free cash flow generation in the range of $1.8 billion to $2.0 billion;
-
Capital expenditures in the $250 million range;
-
Regular share repurchases of approximately $200 million; and
-
Special share repurchases of approximately $400 million.
In addition, we expect that the acquisition of MWI will contribute an
incremental 8 cents of adjusted diluted earnings per share in the second
half of our fiscal 2015.
Conference Call
The Company will host a conference call to discuss the results at 11:00
a.m. Eastern Time on January 28, 2015.
Participating in the conference call will be:
Steven H. Collis, President & Chief Executive Officer
|
Tim G. Guttman, Executive Vice President & Chief Financial Officer
|
The dial-in number for the live call will be (612) 288-0329. No access
code is required. The live call will also be webcast via the Company’s
website at www.amerisourcebergen.com.
Users are encouraged to log on to the webcast approximately 10 minutes
in advance of the scheduled start time of the call.
Replays of the call will be made available via telephone and webcast. A
replay of the webcast will be posted on www.amerisourcebergen.com
approximately two hours after the completion of the call and will remain
available for thirty days. The telephone replay will also be available
approximately two hours after the completion of the call and will remain
available for seven 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 350338.
About AmerisourceBergen
AmerisourceBergen is one of the largest global pharmaceutical sourcing
and distribution services companies, helping both healthcare providers
and pharmaceutical and biotech manufacturers improve patient access to
products and enhance patient care. With services ranging from drug
distribution and niche premium logistics to reimbursement and
pharmaceutical consulting services, AmerisourceBergen delivers
innovative programs and solutions across the pharmaceutical supply
channel. With nearly $120 billion in annual revenue, AmerisourceBergen
is headquartered in Valley Forge, PA, and employs approximately 14,000
people. AmerisourceBergen is ranked #28 on the Fortune 500 list. For
more information, go to www.amerisourcebergen.com.
AmerisourceBergen's Cautionary Note Regarding Forward-Looking
Statements
Certain of the statements contained in this presentation 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. Words such as "expect," "likely," "outlook," "forecast," "would,"
"could," "should," "can," "will," "project," "intend," "plan,"
"continue," "sustain," "synergy," "on track," "believe," "seek,"
"estimate," "anticipate," "may," "possible," "assume," variations of
such words, and similar expressions are intended to identify such
forward-looking statements. These statements are based on management's
current expectations and are subject to uncertainty and change in
circumstances. These statements are not guarantees of future performance
and are based on assumptions that could prove incorrect or could cause
actual results to vary materially from those indicated. 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; price inflation in branded and
generic pharmaceuticals and price deflation in generics; declining
economic conditions, increased costs of maintaining, or reductions in
AmerisourceBergen's ability to maintain, adequate liquidity and
financing sources, and interest rate and foreign currency exchange rate
fluctuations; the disruption of AmerisourceBergen's cash flow and
ability to return value to its stockholders in accordance with its past
practices, disruption of or changes in vendor, payer and customer
relationships and terms, and the reduction of AmerisourceBergen's
operational, strategic or financial flexibility; volatility and
disruption of the capital and credit markets; economic, business,
competitive and/or regulatory developments in countries where
AmerisourceBergen does business and/or operates outside of the United
States; supplier bankruptcies, insolvencies or other credit failures;
customer bankruptcies, insolvencies or other credit failures; the loss
of one or more key customer or supplier relationships resulting in
changes to the customer or supplier mix; the retention of key customer
or supplier relationships under less favorable economics or the adverse
resolution of any contract or other dispute with customers or suppliers;
risks associated with the strategic, long-term relationship between
Walgreens Boots Alliance, Inc. (including its subsidiaries Walgreen Co.
and Alliance Boots GmbH) and AmerisourceBergen, including the occurrence
of any event, change or other circumstance that could give rise to the
termination, cross-termination or modification of any of the transaction
documents among the parties (including, among others, the distribution
agreement or the generics agreement), an impact on AmerisourceBergen's
earnings per share resulting from the issuance of the warrants to
subsidiaries of Walgreens Boots Alliance, Inc., an inability to realize
anticipated benefits (including benefits resulting from participation in
the Walgreens Boots Alliance Development GmbH joint venture),
AmerisourceBergen's inability to implement its hedging strategy to
mitigate the potentially dilutive effect of the issuance of its common
stock under its special share repurchase program due to its financial
performance, the current and future share price of its common stock, its
expected cash flows, competing priorities for capital, and overall
market conditions; increasing governmental regulations regarding the
pharmaceutical supply channel; federal and state government enforcement
initiatives to detect and prevent suspicious orders of controlled
substances and the diversion of controlled substances, federal and state
prosecution of alleged violations of related laws and regulations, and
any related litigation, including shareholder derivative lawsuits or
other disputes relating to our distribution of controlled substances;
changes in federal and state legislation or regulatory action affecting
pharmaceutical product pricing or reimbursement policies, including
under Medicaid and Medicare, and the effect of such changes on
AmerisourceBergen's customers; frequent changes to laws and regulations
in respect of healthcare fraud and abuse and the increased scrutiny of
the federal government related thereto; qui tam litigation for alleged
violations of fraud and abuse laws and regulations and/or any other laws
and regulations governing the marketing, sale, purchase and/or
dispensing of pharmaceutical products or services and any related
litigation, including shareholder derivative lawsuits; the acquisition
of businesses that do not perform as AmerisourceBergen expects or that
are difficult for it to integrate or control or AmerisourceBergen's
inability to successfully complete any other transaction that it may
wish to pursue from time to time; risks associated with
AmerisourceBergen’s proposed acquisition of MWI, including uncertainties
as to the timing of the tender offer and the subsequent merger, the
possibility that various conditions to the consummation of the tender
offer or the merger may not be satisfied or waived, the effects of
disruption from the transactions on the respective businesses of
AmerisourceBergen and MWI and the fact that the announcement or pendency
of the transactions may make it more difficult to establish or maintain
relationships with employees, suppliers and other business partners;
risks associated with international business operations, including
non-compliance with the U.S. Foreign Corrupt Practices Act, anti-bribery
laws and economic sanctions and import laws and regulations; risks
generally associated with the sophisticated information systems on which
AmerisourceBergen relies, including significant breakdown or
interruption of such systems; risks generally associated with data
privacy regulation and the international transfer of personal data;
changes in tax laws or legislative initiatives that could adversely
affect AmerisourceBergen's tax positions and/or AmerisourceBergen's tax
liabilities or adverse resolution of challenges to AmerisourceBergen's
tax positions; natural disasters or other unexpected events that affect
AmerisourceBergen's operations; and other economic, business,
competitive, legal, tax, regulatory and/or operational factors affecting
AmerisourceBergen's 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) and Item 1 (Business) in the
Company’s Annual Report on Form 10-K for the fiscal year ended September
30, 2014 and elsewhere in that report and (ii) in other reports.
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
FINANCIAL SUMMARY
|
(In thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
|
Three
|
|
|
|
|
|
|
Months Ended
|
|
|
|
Months Ended
|
|
|
|
|
|
|
December 31,
|
|
% of
|
|
December 31,
|
|
% of
|
|
%
|
|
|
2014
|
|
Revenue
|
|
2013
|
|
Revenue
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
33,588,602
|
|
|
100.00
|
%
|
|
$
|
29,176,362
|
|
|
100.00
|
%
|
|
15.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
32,836,303
|
|
|
|
|
|
28,488,137
|
|
|
|
|
15.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (1) |
|
|
752,299
|
|
|
2.24
|
%
|
|
|
688,225
|
|
|
2.36
|
%
|
|
9.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling and administrative
|
|
|
416,491
|
|
|
1.24
|
%
|
|
|
364,060
|
|
|
1.25
|
%
|
|
14.4
|
%
|
Depreciation and amortization
|
|
|
49,297
|
|
|
0.15
|
%
|
|
|
43,950
|
|
|
0.15
|
%
|
|
12.2
|
%
|
Warrants
|
|
|
371,405
|
|
|
1.11
|
%
|
|
|
116,297
|
|
|
0.40
|
%
|
|
219.4
|
%
|
Employee severance, litigation and other
|
|
|
3,503
|
|
|
0.01
|
%
|
|
|
4,302
|
|
|
0.01
|
%
|
|
-18.6
|
%
|
Total operating expenses
|
|
|
840,696
|
|
|
2.50
|
%
|
|
|
528,609
|
|
|
1.81
|
%
|
|
59.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
(88,397
|
)
|
|
-0.26
|
%
|
|
|
159,616
|
|
|
0.55
|
%
|
|
-155.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Other loss (income)
|
|
|
1,314
|
|
|
-
|
%
|
|
|
(597
|
)
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
17,342
|
|
|
0.05
|
%
|
|
|
18,832
|
|
|
0.06
|
%
|
|
-7.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
|
|
|
(107,053
|
)
|
|
-0.32
|
%
|
|
|
141,381
|
|
|
0.48
|
%
|
|
-175.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
92,894
|
|
|
0.28
|
%
|
|
|
92,450
|
|
|
0.32
|
%
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
|
|
|
(199,947
|
)
|
|
-0.60
|
%
|
|
|
48,931
|
|
|
0.17
|
%
|
|
-508.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of income taxes
|
|
|
-
|
|
|
|
|
|
(7,546
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
($199,947
|
)
|
|
-0.60
|
%
|
|
$
|
41,385
|
|
|
0.14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
($0.91
|
)
|
|
|
|
$
|
0.21
|
|
|
|
|
-533.3
|
%
|
Discontinued operations
|
|
|
-
|
|
|
|
|
|
(0.03
|
)
|
|
|
|
|
Total
|
|
|
($0.91
|
)
|
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
($0.91
|
)
|
|
|
|
$
|
0.21
|
|
|
|
|
-533.3
|
%
|
Discontinued operations
|
|
|
-
|
|
|
|
|
|
(0.03
|
)
|
|
|
|
|
Rounding
|
|
|
-
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
Total
|
|
|
($0.91
|
)
|
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
219,456
|
|
|
|
|
|
230,277
|
|
|
|
|
|
Diluted (2) |
|
|
219,456
|
|
|
|
|
|
237,012
|
|
|
|
|
-7.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes a $144.0 million LIFO expense charge in
the three months ended December 31, 2014. Includes a $57.6 million
LIFO expense charge and a $21.0 million gain from antitrust
litigation settlements in the three months ended December 31, 2013.
|
(2) Stock options, restricted stock, restricted stock
units and the Warrants issued to Walgreens Boots Alliance
were anti-dilutive for the three months ended December 31, 2014.
The dilutive effect of these items is included in the three months
ended December 31, 2013.
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
RECONCILIATION OF CONTINUING OPERATIONS (GAAP) TO ADJUSTED
CONTINUING OPERATIONS (NON-GAAP)
|
(in thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change vs.
|
|
|
|
|
|
|
|
|
|
|
Prior Year
|
|
|
Three Months Ended December 31, 2014
|
|
|
|
Quarter
|
|
|
|
|
|
|
|
|
Acquisition
|
|
Employee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related
|
|
Severance,
|
|
|
|
|
|
|
|
|
|
|
Warrant
|
|
LIFO
|
|
Intangibles
|
|
Litigation and
|
|
Adjusted
|
|
|
|
Adjusted
|
|
|
GAAP
|
|
Expense (2)
|
|
Expense
|
|
Amortization
|
|
Other
|
|
Non-GAAP
|
|
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
33,588,602
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
33,588,602
|
|
|
|
|
15.1
|
%
|
Cost of goods sold
|
|
|
32,836,303
|
|
|
|
-
|
|
|
|
(144,024
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
32,692,279
|
|
|
|
|
14.9
|
%
|
Gross profit
|
|
|
752,299
|
|
|
|
-
|
|
|
|
144,024
|
|
|
|
-
|
|
|
|
-
|
|
|
|
896,323
|
|
|
|
|
23.7
|
%
|
Operating expenses
|
|
|
840,696
|
|
|
|
(371,405
|
)
|
|
|
-
|
|
|
|
(5,032
|
)
|
|
|
(3,503
|
)
|
|
|
460,756
|
|
|
|
|
14.6
|
%
|
Operating (loss) income
|
|
|
(88,397
|
)
|
|
|
371,405
|
|
|
|
144,024
|
|
|
|
5,032
|
|
|
|
3,503
|
|
|
|
435,567
|
|
|
|
|
35.0
|
%
|
Other loss
|
|
|
1,314
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(298
|
)
|
|
|
-
|
|
|
|
1,016
|
|
|
|
|
|
Interest expense, net
|
|
|
17,342
|
|
|
|
(2,140
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
15,202
|
|
|
|
|
-19.3
|
%
|
(Loss) income before income taxes
|
|
|
(107,053
|
)
|
|
|
373,545
|
|
|
|
144,024
|
|
|
|
5,330
|
|
|
|
3,503
|
|
|
|
419,349
|
|
|
|
|
37.7
|
%
|
Income taxes (1) |
|
|
92,894
|
|
|
|
7,140
|
|
|
|
55,496
|
|
|
|
2,054
|
|
|
|
1,350
|
|
|
|
158,934
|
|
|
|
|
36.6
|
%
|
(Loss) income from continuing operations
|
|
$
|
(199,947
|
)
|
|
$
|
366,405
|
|
|
$
|
88,528
|
|
|
$
|
3,276
|
|
|
$
|
2,153
|
|
|
$
|
260,415
|
|
|
|
|
38.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share from continuing operations
|
|
$
|
(0.91
|
)
|
|
$
|
1.64
|
|
|
$
|
0.39
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
1.14
|
|
|
(4)
|
|
42.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common shares outstanding (3) |
|
|
219,456
|
|
|
|
229,285
|
|
|
|
229,285
|
|
|
|
229,285
|
|
|
|
229,285
|
|
|
|
229,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
2.24
|
%
|
|
|
|
|
|
|
|
|
|
|
2.67
|
%
|
|
|
|
|
Operating expenses
|
|
|
2.50
|
%
|
|
|
|
|
|
|
|
|
|
|
1.37
|
%
|
|
|
|
|
Operating (loss) income
|
|
|
-0.26
|
%
|
|
|
|
|
|
|
|
|
|
|
1.30
|
%
|
|
|
|
|
|
(1) The amount of Warrant expense deductible for income
tax purposes is based on the initial valuation of the Warrants.
Therefore, the income tax rate on Warrant expense will vary by
quarter depending upon the quarterly changes in the fair value of
the Warrants.
|
|
|
(2) Warrant expense is recorded as an operating expense.
In connection with the special $650 million share repurchase
program, the Company issued $600 million of 1.15% senior notes due
in May 2017. The interest expense incurred relating to this
borrowing has been excluded from the non-GAAP presentation.
|
|
|
(3) See separate table for Reconciliation of Diluted
Shares Outstanding (GAAP to non-GAAP).
|
|
|
(4) The sum of the components may not equal the total due
to rounding.
|
|
|
Note: Management considers GAAP financial measures as well as the
presented non-GAAP financial measures in evaluating the Company's
operating performance. Therefore, the Company believes that the
presentation of non-GAAP financial measures provides useful
supplementary information to, and facilitates additional analysis
by, investors.
|
|
|
AMERISOURCEBERGEN CORPORATION
|
RECONCILIATION OF CONTINUING OPERATIONS (GAAP) TO ADJUSTED
CONTINUING OPERATIONS (NON-GAAP)
|
(in thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2013
|
|
|
|
|
|
|
|
|
Gain on
|
|
|
|
Acquisition
|
|
Employee
|
|
|
|
|
|
|
|
|
|
|
Antitrust
|
|
|
|
Related
|
|
Severance,
|
|
|
|
|
|
|
|
|
Warrant
|
|
Litigation
|
|
|
|
Intangibles
|
|
Litigation and
|
|
Adjusted
|
|
|
|
|
GAAP
|
|
Expense
|
|
Settlements
|
|
LIFO Expense
|
|
Amortization
|
|
Other
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
29,176,362
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
29,176,362
|
|
|
|
Cost of goods sold
|
|
|
28,488,137
|
|
|
|
-
|
|
|
|
21,023
|
|
|
|
(57,582
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
28,451,578
|
|
|
|
Gross profit
|
|
|
688,225
|
|
|
|
-
|
|
|
|
(21,023
|
)
|
|
|
57,582
|
|
|
|
-
|
|
|
|
-
|
|
|
|
724,784
|
|
|
|
Operating expenses
|
|
|
528,609
|
|
|
|
(116,297
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,958
|
)
|
|
|
(4,302
|
)
|
|
|
402,052
|
|
|
|
Operating income
|
|
|
159,616
|
|
|
|
116,297
|
|
|
|
(21,023
|
)
|
|
|
57,582
|
|
|
|
5,958
|
|
|
|
4,302
|
|
|
|
322,732
|
|
|
|
Other income
|
|
|
(597
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(597
|
)
|
|
|
Interest expense, net
|
|
|
18,832
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18,832
|
|
|
|
Income before income taxes
|
|
|
141,381
|
|
|
|
116,297
|
|
|
|
(21,023
|
)
|
|
|
57,582
|
|
|
|
5,958
|
|
|
|
4,302
|
|
|
|
304,497
|
|
|
|
Income taxes (1)
|
|
|
92,450
|
|
|
|
6,315
|
|
|
|
(7,882
|
)
|
|
|
21,588
|
|
|
|
2,234
|
|
|
|
1,613
|
|
|
|
116,318
|
|
|
|
Income from continuing operations
|
|
$
|
48,931
|
|
|
$
|
109,982
|
|
|
$
|
(13,141
|
)
|
|
$
|
35,994
|
|
|
$
|
3,724
|
|
|
$
|
2,689
|
|
|
$
|
188,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share from continuing operations
|
|
$
|
0.21
|
|
|
$
|
0.47
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.15
|
|
|
$
|
0.02
|
|
|
$
|
0.01
|
|
|
$
|
0.80
|
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common shares outstanding (2) |
|
|
237,012
|
|
|
|
235,383
|
|
|
|
235,383
|
|
|
|
235,383
|
|
|
|
235,383
|
|
|
|
235,383
|
|
|
|
235,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
2.36
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
2.48
|
%
|
|
|
Operating expenses
|
|
|
1.81
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
1.38
|
%
|
|
|
Operating income
|
|
|
0.55
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
1.11
|
%
|
|
|
|
(1) The amount of Warrant expense deductible for income
tax purposes is based on the initial valuation of the Warrants.
Therefore, the income tax rate on Warrant expense will vary by
quarter depending upon the quarterly changes in the fair value of
the Warrants.
|
|
|
(2) See separate table for Reconciliation of Diluted
Shares Outstanding (GAAP to non-GAAP).
|
|
|
(3) The sum of the components may not equal the total due
to rounding.
|
|
|
Note: Management considers GAAP financial measures as well as the
presented non-GAAP financial measures in evaluating the Company's
operating performance. Therefore, the Company believes that the
presentation of non-GAAP financial measures provides useful
supplementary information to, and facilitates additional analysis
by, investors.
|
|
|
AMERISOURCEBERGEN CORPORATION
|
RECONCILIATION OF DILUTED SHARES OUTSTANDING (GAAP TO NON-GAAP)
|
(In thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
Basic shares outstanding
|
|
219,456
|
|
230,277
|
|
|
|
|
|
|
Stock option, restricted stock, and restricted stock unit dilution
|
|
-
|
|
5,106
|
|
|
|
|
|
|
Warrant dilution
|
|
-
|
|
1,629
|
|
|
|
|
|
|
GAAP diluted shares outstanding
|
|
219,456
|
|
237,012
|
|
|
|
|
|
|
Warrant dilution (1) |
|
-
|
|
(1,629
|
)
|
|
|
|
|
|
Shares repurchased under a special share repurchase program (1) |
|
4,839
|
|
-
|
|
|
|
|
|
|
Stock option, restricted stock, and restricted stock unit dilution (2) |
|
4,990
|
|
-
|
|
|
|
|
|
|
Non-GAAP diluted shares outstanding
|
|
229,285
|
|
235,383
|
|
|
(1) For the non-GAAP presentation, diluted weighted
average common shares outstanding have been adjusted to exclude the
impact of the Warrants and the shares repurchased under a special
$650 million share repurchase program, which was established to
mitigate the potentially dilutive effect of the Warrants and
supplements our previously executed hedging strategy.
|
|
|
(2) For the non-GAAP presentation, diluted weighted
average common shares outstanding have been adjusted to include the
impact of the stock options, restricted stock, and restricted stock
units that were anti-dilutive for the GAAP presentation.
|
|
AMERISOURCEBERGEN CORPORATION
|
SUMMARY SEGMENT INFORMATION
|
(dollars in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
Revenue
|
|
2014
|
|
2013
|
|
% Change
|
|
|
|
|
|
|
|
Pharmaceutical Distribution
|
|
$
|
32,982,724
|
|
|
$
|
28,622,591
|
|
|
15.2
|
%
|
Other
|
|
|
696,001
|
|
|
|
604,132
|
|
|
15.2
|
%
|
Intersegment eliminations
|
|
|
(90,123
|
)
|
|
|
(50,361
|
)
|
|
79.0
|
%
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
33,588,602
|
|
|
$
|
29,176,362
|
|
|
15.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
Operating (loss) income
|
|
2014
|
|
2013
|
|
% Change
|
|
|
|
|
|
|
|
Pharmaceutical Distribution
|
|
$
|
390,401
|
|
|
$
|
286,782
|
|
|
36.1
|
%
|
Other
|
|
|
45,166
|
|
|
|
35,950
|
|
|
25.6
|
%
|
Total segment operating income
|
|
|
435,567
|
|
|
|
322,732
|
|
|
35.0
|
%
|
Gains on antitrust litigation settlements
|
|
|
-
|
|
|
|
21,023
|
|
|
|
LIFO expense
|
|
|
(144,024
|
)
|
|
|
(57,582
|
)
|
|
|
Acquisition related intangibles amortization
|
|
|
(5,032
|
)
|
|
|
(5,958
|
)
|
|
|
Warrant expense
|
|
|
(371,405
|
)
|
|
|
(116,297
|
)
|
|
|
Employee severance, litigation and other
|
|
|
(3,503
|
)
|
|
|
(4,302
|
)
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
($88,397
|
)
|
|
$
|
159,616
|
|
|
-155.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical Distribution
|
|
|
|
|
|
|
Gross profit
|
|
|
2.28
|
%
|
|
|
2.08
|
%
|
|
|
Operating expenses
|
|
|
1.10
|
%
|
|
|
1.07
|
%
|
|
|
Operating income
|
|
|
1.18
|
%
|
|
|
1.00
|
%
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Gross profit
|
|
|
20.73
|
%
|
|
|
21.61
|
%
|
|
|
Operating expenses
|
|
|
14.24
|
%
|
|
|
15.66
|
%
|
|
|
Operating income
|
|
|
6.49
|
%
|
|
|
5.95
|
%
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (GAAP)
|
|
|
|
|
|
|
Gross profit
|
|
|
2.24
|
%
|
|
|
2.36
|
%
|
|
|
Operating expenses
|
|
|
2.50
|
%
|
|
|
1.81
|
%
|
|
|
Operating (loss) income
|
|
|
-0.26
|
%
|
|
|
0.55
|
%
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (Non-GAAP)
|
|
|
|
|
|
|
Gross profit
|
|
|
2.67
|
%
|
|
|
2.48
|
%
|
|
|
Operating expenses
|
|
|
1.37
|
%
|
|
|
1.38
|
%
|
|
|
Operating income
|
|
|
1.30
|
%
|
|
|
1.11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
December 31,
|
|
September 30,
|
|
|
2014
|
|
2014
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,298,756
|
|
$
|
1,808,513
|
Accounts receivable, net
|
|
|
7,144,031
|
|
|
6,312,883
|
Merchandise inventories
|
|
|
10,628,342
|
|
|
8,593,852
|
Prepaid expenses and other
|
|
|
73,581
|
|
|
84,957
|
Total current assets
|
|
|
20,144,710
|
|
|
16,800,205
|
|
|
|
|
|
Property and equipment, net
|
|
|
907,004
|
|
|
899,582
|
Other long-term assets
|
|
|
3,853,202
|
|
|
3,832,396
|
|
|
|
|
|
Total assets
|
|
$
|
24,904,916
|
|
$
|
21,532,183
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
19,031,658
|
|
$
|
15,592,834
|
Other current liabilities
|
|
|
1,773,375
|
|
|
1,657,326
|
Total current liabilities
|
|
|
20,805,033
|
|
|
17,250,160
|
|
|
|
|
|
Long-term debt
|
|
|
1,995,885
|
|
|
1,995,632
|
|
|
|
|
|
Other long-term liabilities
|
|
|
335,652
|
|
|
329,492
|
|
|
|
|
|
Stockholders' equity
|
|
|
1,768,346
|
|
|
1,956,899
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
24,904,916
|
|
$
|
21,532,183
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Three
|
|
Three
|
|
|
Months Ended
|
|
Months Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
Net (loss) income
|
|
|
($199,947
|
)
|
|
$
|
41,385
|
|
Loss from discontinued operations
|
|
|
-
|
|
|
|
7,546
|
|
(Loss) income from continuing operations
|
|
|
(199,947
|
)
|
|
|
48,931
|
|
Adjustments to reconcile (loss) income from continuing operations
to net cash provided by (used in) operating activities (1)
|
|
|
420,754
|
|
|
|
174,642
|
|
Changes in operating assets and liabilities, excluding the effects
of acquisitions:
|
|
|
|
|
Accounts receivable
|
|
|
(766,718
|
)
|
|
|
(159,120
|
)
|
Merchandise inventories (2) |
|
|
(2,096,578
|
)
|
|
|
(1,626,618
|
)
|
Accounts payable, accrued expenses, and income taxes
|
|
|
3,529,971
|
|
|
|
523,117
|
|
Other
|
|
|
9,482
|
|
|
|
42,951
|
|
Net cash provided by (used in) operating activities - continuing
operations
|
|
|
896,964
|
|
|
|
(996,097
|
)
|
Net cash used in operating activities - discontinued operations
|
|
|
-
|
|
|
|
(7,546
|
)
|
Net cash provided by (used in) operating activities
|
|
|
896,964
|
|
|
|
(1,003,643
|
)
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
Capital expenditures
|
|
|
(52,557
|
)
|
|
|
(59,183
|
)
|
Cost of acquired companies, net of cash acquired
|
|
|
(24,604
|
)
|
|
|
(9,103
|
)
|
Other
|
|
|
5
|
|
|
|
83
|
|
Net cash used in investing activities
|
|
|
(77,156
|
)
|
|
|
(68,203
|
)
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
Net borrowings
|
|
|
-
|
|
|
|
423,000
|
|
Purchases of common stock (3) |
|
|
(300,213
|
)
|
|
|
(19,652
|
)
|
Exercises of stock options
|
|
|
40,164
|
|
|
|
32,326
|
|
Cash dividends on common stock
|
|
|
(64,025
|
)
|
|
|
(54,367
|
)
|
Purchases of capped call options
|
|
|
-
|
|
|
|
(192,995
|
)
|
Other
|
|
|
(5,491
|
)
|
|
|
(7
|
)
|
Net cash (used in) provided by financing activities
|
|
|
(329,565
|
)
|
|
|
188,305
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
490,243
|
|
|
|
(883,541
|
)
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
1,808,513
|
|
|
|
1,231,006
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
2,298,756
|
|
|
$
|
347,465
|
|
|
(1) Adjustments include non-cash warrant expense of
$371.4 million and $116.3 million for the three months ended
December 31, 2014 and 2013, respectively.
|
|
|
(2) Merchandise inventories include LIFO expense of
$144.0 million and $57.6 million for the three months ended December
31, 2014 and 2013, respectively.
|
|
|
(3) Includes purchases made under the special share
repurchase program totaling $150.2 million in the three months ended
December 31, 2014, which includes $18.0 million of fiscal 2014
purchases that cash settled in October 2014.
|
|
Source: AmerisourceBergen Corporation
AmerisourceBergen Corporation
Barbara Brungess
Vice
President, Corporate & Investor Relations
610-727-7199
bbrungess@amerisourcebergen.com