Company Reaffirmed Fiscal Year 2011 EPS Guidance Range of $2.31 to
$2.41
VALLEY FORGE, Pa., Feb 04, 2011 (BUSINESS WIRE) --
AmerisourceBergen Corporation (NYSE:ABC) today reported that in its
fiscal year 2011 first quarter, ended December 31, 2010, diluted
earnings per share were $0.57, a 10 percent increase. Revenue in the
quarter was a record $19.9 billion, up 3 percent. The Company also
reaffirmed its expectations for fiscal year 2011 diluted earnings per
share in the range of $2.31 to $2.41. All the results are presented in
accordance with U.S. generally accepted accounting principles (GAAP).
Fiscal First Quarter Highlights
-
Record Revenue of $19.9 billion, up 2.9 percent.
-
Diluted earnings per share of $0.57, a 9.6 percent increase.
-
Operating expense ratio of a record low 1.53 percent, down 3 basis
points.
-
Operating margin of 1.39 percent, up 3 basis points.
-
Share repurchases of $185 million.
"In the December quarter, we delivered outstanding performance on top of
exceptional performance last year. We had strong results in all of our
business units, we benefited from successful generic drug launches, and
we continued to demonstrate expense and working capital discipline,"
said R. David Yost, AmerisourceBergen Chief Executive Officer. "Our
balance sheet remains strong, and we continue to have excellent
financial flexibility. We are off to a solid start for the fiscal year,
demonstrating the strength of our two growth drivers - generics and
specialty pharmaceuticals."
Results Highlights
- Revenue: Revenue was a record $19.9
billion in the first quarter of fiscal 2011, a 2.9 percent increase
over the same quarter in the previous fiscal year, driven by a 4.8
percent increase in AmerisourceBergen Drug Corporation (ABDC) revenue
and offset by the expected decline in AmerisourceBergen Specialty
Group (ABSG) revenue, which was down 3.8 percent. The above-market
growth in ABDC revenue was driven by certain of our large customers,
and 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 first quarter was $580.2 million, a 3.0 percent increase over the
year-ago same period, primarily due to increased revenue, including
low double-digit growth in generic revenue, increased contributions
from fee-for-service agreements with manufacturers, and a
non-recurring $12 million benefit in connection with a customer being
acquired by a third party. The benefits were offset in part by normal
competitive pressures and an expected decline in specialty generics
gross profit in the quarter following exceptionally strong performance
in the prior year quarter. Gross profit as a percentage of revenue
increased 1 basis point to 2.92 percent over the same period in the
previous year. The LIFO charge in the fiscal 2011 first quarter was
$9.9 million compared with a $7.8 million charge in the previous
year's first quarter.
- Operating Expenses: For the first quarter
of fiscal 2011, operating expenses were $303.5 million compared with
$301.0 million in the prior fiscal year's first quarter, a 0.8 percent
increase, which was well below the 2.9 percent revenue increase. The
increase in operating expenses was due to the expected increase in
information technology costs which were offset by a reduction in bad
debt and incentive compensation costs. Operating expenses as a
percentage of revenue in the fiscal first quarter of 2011 were a
record low 1.53 percent, down 3 basis points from the same period in
the previous fiscal year due to productivity gains.
- Operating Income: In the fiscal 2011
first quarter, operating income increased 5.5 percent to $276.8
million, due primarily to the increase in gross profit. Operating
income as a percentage of revenue increased 3 basis points to 1.39
percent in the period compared with the previous year's first quarter.
- Tax Rate: The effective tax rate for the
first quarter of fiscal 2011 was 38.1 percent, compared to 38.2
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 9.6 percent to $0.57 in the first quarter of fiscal 2011
compared to $0.52 in the previous fiscal year's first quarter.
Earnings per share growth exceeded the 6% growth in net income due to
the 4% reduction in diluted average shares outstanding.
- Shares Outstanding: Diluted average
shares outstanding for the first quarter of fiscal year 2011 were
280.7 million, down 10.6 million shares from the previous fiscal
year's first quarter due primarily to share repurchases, net of option
exercises over the last twelve months.
Fiscal Year 2011 Expectations
"Looking ahead, the Company expects diluted earnings per share in fiscal
year 2011 to be in the range of $2.31 to $2.41," said R. David Yost,
AmerisourceBergen Chief Executive Officer. "Key assumptions supporting
the diluted earnings per share range for fiscal year 2011 are: revenue
growth of between 2 percent and 4 percent; operating margin expansion in
the low to mid single-digit basis points range; and free cash flow in
the range of $625 million to $700 million, which includes capital
expenditures in the $150 million range. Subject to market conditions, we
expect to spend approximately $400 million to repurchase our common
shares in fiscal year 2011."
Conference Call
The Company will host a conference call to discuss its results at 11:00
a.m. Eastern Standard Time on February 4, 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. February 4, 2011 until 11:59 p.m. February 11, 2011. The Webcast
replay will be available for 30 days.
To access the replay via telephone:
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Dial in:
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866-373-4995 from within the U.S.
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203-369-0275 from outside the U.S.
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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 $78 billion in annual 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.
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AMERISOURCEBERGEN CORPORATION
|
FINANCIAL SUMMARY
|
(In thousands, except per share data)
|
(unaudited)
|
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|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Three
|
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|
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Three
|
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|
|
|
|
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Months Ended
|
|
|
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Months Ended
|
|
|
|
|
|
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December 31,
|
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% of
|
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December 31,
|
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% of
|
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%
|
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|
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2010
|
|
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Revenue
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|
|
2009
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|
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Revenue
|
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Change
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|
|
|
|
|
|
|
|
Revenue
|
|
$
|
19,888,609
|
|
|
100.00
|
%
|
|
$
|
19,335,859
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|
|
100.00
|
%
|
|
2.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
19,308,377
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|
|
|
|
|
18,772,489
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|
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|
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2.9
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%
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
580,232
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|
|
2.92
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%
|
|
|
563,370
|
|
|
2.91
|
%
|
|
3.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling and administrative
|
|
|
278,033
|
|
|
1.40
|
%
|
|
|
280,239
|
|
|
1.45
|
%
|
|
-0.8
|
%
|
Depreciation and amortization
|
|
|
25,433
|
|
|
0.13
|
%
|
|
|
20,797
|
|
|
0.11
|
%
|
|
22.3
|
%
|
Facility consolidations, employee severance and other
|
|
|
-
|
|
|
-
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%
|
|
|
(48
|
)
|
|
-
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%
|
|
|
Total operating expenses
|
|
|
303,466
|
|
|
1.53
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%
|
|
|
300,988
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|
|
1.56
|
%
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
276,766
|
|
|
1.39
|
%
|
|
|
262,382
|
|
|
1.36
|
%
|
|
5.5
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%
|
|
|
|
|
|
|
|
|
|
|
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Other (income) loss
|
|
|
(1,667
|
)
|
|
-0.01
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%
|
|
|
277
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|
|
-
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%
|
|
|
|
|
|
|
|
|
|
|
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|
|
Interest expense, net
|
|
|
19,144
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|
|
0.10
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%
|
|
|
17,267
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|
|
0.09
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%
|
|
10.9
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%
|
|
|
|
|
|
|
|
|
|
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|
Income before income taxes
|
|
|
259,289
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|
|
1.30
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%
|
|
|
244,838
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|
|
1.27
|
%
|
|
5.9
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%
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
98,789
|
|
|
0.50
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%
|
|
|
93,531
|
|
|
0.48
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%
|
|
5.6
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%
|
|
|
|
|
|
|
|
|
|
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|
Net income
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$
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160,500
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|
|
0.81
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%
|
|
$
|
151,307
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|
|
0.78
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%
|
|
6.1
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%
|
|
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Earnings per share:
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Basic
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$
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0.58
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$
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0.53
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9.4
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%
|
Diluted
|
|
$
|
0.57
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|
$
|
0.52
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9.6
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%
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|
|
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|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
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Basic
|
|
|
275,605
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|
|
|
|
|
286,955
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|
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Diluted (1)
|
|
|
280,693
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|
|
|
|
|
291,287
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|
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|
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|
|
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|
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|
|
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(1) Includes the dilutive effect of stock options, restricted stock,
and restricted stock units.
|
|
|
|
|
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AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
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ASSETS
|
|
|
|
|
|
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December 31,
|
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September 30,
|
|
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2010
|
|
2010
|
Current assets:
|
|
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|
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Cash and cash equivalents
|
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$
|
1,400,895
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$
|
1,658,182
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Accounts receivable, net
|
|
|
3,551,315
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|
|
3,827,484
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Merchandise inventories
|
|
|
5,440,751
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|
|
5,210,098
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Prepaid expenses and other
|
|
|
35,212
|
|
|
52,586
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Total current assets
|
|
|
10,428,173
|
|
|
10,748,350
|
|
|
|
|
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Property and equipment, net
|
|
|
736,812
|
|
|
711,712
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Other long-term assets
|
|
|
2,967,334
|
|
|
2,974,781
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|
|
|
|
|
Total assets
|
|
$
|
14,132,319
|
|
$
|
14,434,843
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|
|
|
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|
|
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|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
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|
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Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
8,467,004
|
|
$
|
8,833,285
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Current portion of long-term debt
|
|
|
115,379
|
|
|
422
|
Other current liabilities
|
|
|
1,058,522
|
|
|
1,072,637
|
Total current liabilities
|
|
|
9,640,905
|
|
|
9,906,344
|
|
|
|
|
|
Long-term debt, less current portion
|
|
|
1,287,410
|
|
|
1,343,158
|
|
|
|
|
|
Other long-term liabilities
|
|
|
241,998
|
|
|
231,044
|
|
|
|
|
|
Stockholders' equity
|
|
|
2,962,006
|
|
|
2,954,297
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
14,132,319
|
|
$
|
14,434,843
|
|
|
|
|
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AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Three
|
|
Three
|
|
|
Months Ended
|
|
Months Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2010
|
|
|
|
2009
|
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
Net income
|
|
$
|
160,500
|
|
|
$
|
151,307
|
|
Adjustments to reconcile net income to net cash used in operating
activities
|
|
|
61,011
|
|
|
|
61,908
|
|
Changes in operating assets and liabilities
|
|
|
(320,711
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)
|
|
|
(254,904
|
)
|
Net cash used in operating activities
|
|
|
(99,200
|
)
|
|
|
(41,689
|
)
|
|
|
|
|
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Investing Activities:
|
|
|
|
|
Capital expenditures
|
|
|
(50,091
|
)
|
|
|
(42,574
|
)
|
Other
|
|
|
-
|
|
|
|
127
|
|
Net cash used in investing activities
|
|
|
(50,091
|
)
|
|
|
(42,447
|
)
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
Net borrowings
|
|
|
58,401
|
|
|
|
195,066
|
|
Purchases of common stock
|
|
|
(185,362
|
)
|
|
|
(144,626
|
)
|
Exercises of stock options
|
|
|
46,982
|
|
|
|
30,416
|
|
Cash dividends on common stock
|
|
|
(27,735
|
)
|
|
|
(23,149
|
)
|
Debt issuance costs and other
|
|
|
(282
|
)
|
|
|
(3,372
|
)
|
Net cash (used in) provided by financing activities
|
|
|
(107,996
|
)
|
|
|
54,335
|
|
|
|
|
|
|
Decrease in cash and cash equivalents
|
|
|
(257,287
|
)
|
|
|
(29,801
|
)
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
1,658,182
|
|
|
|
1,009,368
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,400,895
|
|
|
$
|
979,567
|
|

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