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Share Name | Share Symbol | Market | Type |
---|---|---|---|
AmerisourceBergen Corp | NYSE:ABC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 179.98 | 0 | 01:00:00 |
Revenues of $49.2 billion for the Second Quarter, a 3.7 Percent Increase Year-Over-Year
Second Quarter GAAP Diluted EPS of $2.10 and Adjusted Diluted EPS of $2.53
Adjusted Diluted EPS Guidance Range Raised to $8.45 to $8.60 for Fiscal 2021
AmerisourceBergen Corporation (NYSE: ABC) today reported that in its fiscal year 2021 second quarter ended March 31, 2021, revenue increased 3.7 percent year-over-year to $49.2 billion. On the basis of U.S. generally accepted accounting principles (GAAP), diluted earnings per share (EPS) was $2.10 for the March quarter of fiscal 2021, compared to $4.64 in the prior year quarter. Adjusted diluted EPS, which is a non-GAAP measure that excludes items described below, increased 5.4 percent to $2.53 in the fiscal second quarter.
AmerisourceBergen is updating its outlook for fiscal year 2021. The Company does not provide forward-looking guidance on a GAAP basis, as discussed below in Fiscal Year 2021 Expectations. Adjusted diluted EPS guidance has been raised from the previous expectation of $8.40 to $8.60 to a range of $8.45 to $8.60, reflecting growth of 7 percent to 9 percent versus the previous fiscal year.
"AmerisourceBergen continues to prove our vital role as a key pillar in the healthcare system. Our solid performance in the March quarter was fueled by our associates who continue to work diligently to provide innovative solutions for our partners to ultimately serve their patients," said Steven H. Collis, Chairman, President and Chief Executive Officer of AmerisourceBergen.
"Driven by our purpose of being united in our responsibility to create healthier futures, we are strengthening our portfolio of solutions for customers, expanding on our leadership in specialty, focusing on execution and leveraging our capabilities and expertise to support pharmaceutical innovation," Mr. Collis continued. "AmerisourceBergen is well-positioned to deliver long-term, sustainable growth, supported by our diverse and inclusive teams and our investments in our people and culture."
Second Quarter Fiscal Year 2021 Summary Results
GAAP
Adjusted (Non-GAAP)
Revenue
$49.2B
$49.2B
Gross Profit
$1.5B
$1.5B
Operating Expenses
$909M
$806M
Operating Income
$624M
$707M
Interest Expense, Net
$35M
$35M
Effective Tax Rate
23.4%
21.9%
Net Income Attributable to ABC
$435M
$524M
Diluted Earnings Per Share
$2.10
$2.53
Diluted Shares Outstanding
207M
207M
Below, AmerisourceBergen presents descriptive summaries of the Company’s GAAP and adjusted (non-GAAP) quarterly results. In the tables that follow, GAAP results and GAAP to non-GAAP reconciliations are presented. For more information related to non-GAAP financial measures, including adjustments made in the periods presented, please refer to the "Supplemental Information Regarding non-GAAP Financial Measures" following the tables.
Second Quarter GAAP Results
Second Quarter Adjusted (non-GAAP) Results
Segment Discussion
The Company's operations are comprised of the Pharmaceutical Distribution Services reportable segment and other operating segments that are not significant enough to require separate reportable segment disclosure and, therefore, have been included in Other for the purpose of the reportable segment presentation. Other consists of operating segments that focus on global commercialization services and animal health and includes AmerisourceBergen Consulting Services (ABCS), World Courier and MWI Animal Health (MWI).
Pharmaceutical Distribution Services Segment
Pharmaceutical Distribution Services revenue was $47.1 billion, an increase of 3.4 percent compared to the same quarter in the prior fiscal year primarily due to increased sales of specialty products, including COVID-19 treatments. Segment operating income of $589.0 million in the second quarter of fiscal 2021 was up 4.6 percent compared to the same period in the previous fiscal year, primarily due to the growth in sales of specialty products.
Other
Revenue in Other was $2.1 billion in the second quarter of fiscal 2021, an increase of 11.5 percent compared to the same period in the prior fiscal year due to growth at all three operating segments: MWI, ABCS, and World Courier. Operating income in Other increased 13.8 percent to $123.2 million in the second quarter of fiscal 2021 due to the strong performance of World Courier and MWI.
Recent Company Highlights & Milestones
Fiscal Year 2021 Expectations
The Company does not provide forward-looking guidance on a GAAP basis as certain financial information, the probable significance of which cannot be determined, is not available or cannot be reasonably estimated. Please refer to the Supplemental Information Regarding Non-GAAP Financial Measures following the tables for additional information.
Fiscal Year 2021 Expectations on an Adjusted (non-GAAP) Basis
AmerisourceBergen has updated its fiscal year 2021 financial guidance to reflect the Company’s continued strong performance, including better than expected performance in our Global Commercialization Services & Animal Health group, and an incrementally higher expected share count for the year. This updated financial guidance does not include any contribution from the proposed Alliance Healthcare acquisition and does not reflect the weighted average share count impact of the 2 million shares of AmerisourceBergen common stock that will be delivered at closing of the transaction. The Company now expects:
Additional expectations now include:
All other previously communicated aspects of the Company's fiscal year 2021 financial guidance and assumptions remain the same.
Dividend Declaration
The Company's Board of Directors declared a quarterly cash dividend of $0.44 per common share, payable June 1, 2021, to stockholders of record at the close of business on May 17, 2021.
Conference Call & Slide Presentation
The Company will host a conference call to discuss the results at 8:30 a.m. ET on May 5, 2021. A slide presentation for investors has also been posted on the Company's website at investor.amerisourcebergen.com. Participating in the conference call will be:
The dial-in number for the live call will be (844) 808-6694. From outside the United States, dial +1 (412) 317-5282. No access code is required. The live call will also be webcast via the Company’s website at investor.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 investor.amerisourcebergen.com approximately one hour after the completion of the call and will remain available for one year. The telephone replay will also be available approximately one hour after the completion of the call and will remain available for seven days. To access the telephone replay from within the U.S., dial (877) 344-7529. From Canada, dial +1 (855) 669-9658. From outside the United States and Canada, dial +1 (412) 317-0088. The access code for the replay is 10153917.
About AmerisourceBergen
AmerisourceBergen fosters a positive impact on the health of people and communities around the world by advancing the development and delivery of pharmaceuticals and healthcare products. As a leading global healthcare company, with a foundation in pharmaceutical distribution and solutions for manufacturers, pharmacies and providers, we create unparalleled access, efficiency and reliability for human and animal health. Our 22,000 global team members power our purpose: We are united in our responsibility to create healthier futures. AmerisourceBergen is ranked #10 on the Fortune 500 with more than $185 billion in annual revenue. Learn more at investor.amerisourcebergen.com.
AmerisourceBergen's Cautionary Note Regarding 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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Securities Exchange Act"). Words such as "expect," "likely," "outlook," "forecast," "would," "could," "should," "can," "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 changes in circumstances and speak only as of the date hereof. These statements are not guarantees of future performance and are based on assumptions and estimates 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: unfavorable trends in brand and generic pharmaceutical pricing, including in rate or frequency of price inflation or deflation; competition and industry consolidation of both customers and suppliers resulting in increasing pressure to reduce prices for our products and services; changes in the United States healthcare and regulatory environment, including changes that could impact prescription drug reimbursement under Medicare and Medicaid; increasing governmental regulations regarding the pharmaceutical supply channel; declining reimbursement rates for pharmaceuticals; continued federal and state government enforcement initiatives to detect and prevent suspicious orders of controlled substances and the diversion of controlled substances; continued prosecution or suit by federal, state and other governmental entities of alleged violations of laws and regulations regarding controlled substances, including due to failure to achieve a global resolution of the multi-district opioid litigation and other related state court litigation, and any related disputes, including shareholder derivative lawsuits; increased federal scrutiny and litigation, including qui tam litigation, for alleged violations of laws and regulations governing the marketing, sale, purchase and/or dispensing of pharmaceutical products or services, and associated reserves and costs; failure to comply with the Corporate Integrity Agreement; material adverse resolution of pending legal proceedings; 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; changes to customer or supplier payment terms, including as a result of the COVID-19 impact on such payment terms; the Company’s ability to consummate the proposed acquisition of Walgreens Boots Alliance, Inc.’s Alliance Healthcare businesses and related strategic transactions; the regulatory approvals required for the proposed acquisition and related strategic transactions not being obtained on the terms expected or on the anticipated schedule or at all; the integration of the Alliance Healthcare business into the Company being more difficult, time consuming or costly than expected; the Company’s or Alliance Healthcare’s failure to achieve expected or targeted future financial and operating performance and results; the effects of disruption from the proposed acquisition and related strategic transactions on the respective businesses of the Company and Alliance Healthcare and the fact that the announcement or pendency of the proposed acquisition and related strategic transactions may make it more difficult to establish or maintain relationships with employees, suppliers and other business partners; the acquisition of businesses, including the proposed acquisition of the Alliance Healthcare businesses and related strategic transactions, that do not perform as expected, or that are difficult to integrate or control, or the inability to capture all of the anticipated synergies related thereto or to capture the anticipated synergies within the expected time period; risks associated with the strategic, long-term relationship between Walgreens Boots Alliance, Inc. and the Company, including with respect to the pharmaceutical distribution agreement and/or the global generic purchasing services arrangement; managing foreign expansion, including non-compliance with the U.S. Foreign Corrupt Practices Act, anti-bribery laws, economic sanctions and import laws and regulations; financial market volatility and disruption; changes in tax laws or legislative initiatives that could adversely affect the Company's tax positions and/or the Company's tax liabilities or adverse resolution of challenges to the Company's tax positions; substantial defaults in payment, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer, including as a result of COVID-19; the loss, bankruptcy or insolvency of a major supplier, including as a result of COVID-19; financial and other impacts of COVID-19 on our operations or business continuity; changes to the customer or supplier mix; malfunction, failure or breach of sophisticated information systems to operate as designed; risks generally associated with data privacy regulation and the international transfer of personal data; natural disasters or other unexpected events, such as additional pandemics, that affect the Company’s operations; the impairment of goodwill or other intangible assets (including any additional impairments with respect to foreign operations), resulting in a charge to earnings; the Company's ability to manage and complete divestitures; the disruption of the Company's cash flow and ability to return value to its stockholders in accordance with its past practices; interest rate and foreign currency exchange rate fluctuations; declining economic conditions in the United States and abroad; and other economic, business, competitive, legal, tax, regulatory and/or operational factors affecting the Company'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), in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020 and elsewhere in that report and (ii) in other reports filed by the Company pursuant to the Securities Exchange Act. The Company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by the federal securities laws.
AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)
Three Months Ended March 31, 2021
% of Revenue
Three Months Ended March 31, 2020
% of Revenue
% Change
Revenue
$
49,154,171
$
47,417,639
3.7
%
Cost of goods sold
47,620,790
46,029,532
3.5
%
Gross profit 1
1,533,381
3.12
%
1,388,107
2.93
%
10.5
%
Operating expenses:
Distribution, selling, and administrative 2
730,081
1.49
%
693,413
1.46
%
5.3
%
Depreciation and amortization
100,797
0.21
%
93,795
0.20
%
7.5
%
Employee severance, litigation, and other 3
78,156
67,732
Impairment of PharMEDium assets
—
223,652
Total operating expenses
909,034
1.85
%
1,078,592
2.27
%
(15.7
)%
Operating income
624,347
1.27
%
309,515
0.65
%
101.7
%
Other loss (income), net 4
23,310
(1,109
)
Interest expense, net
34,526
34,421
0.3
%
Income before income taxes
566,511
1.15
%
276,203
0.58
%
105.1
%
Income tax expense (benefit) 5
132,506
(694,908
)
Net income
434,005
0.88
%
971,111
2.05
%
(55.3
)%
Net loss (income) attributable to noncontrolling interests
1,262
(10,834
)
Net income attributable to AmerisourceBergen Corporation
$
435,267
0.89
%
$
960,277
2.03
%
(54.7
)%
Earnings per share:
Basic
$
2.12
$
4.68
(54.7
)%
Diluted
$
2.10
$
4.64
(54.7
)%
Weighted average common shares outstanding:
Basic
204,916
205,370
(0.2
)%
Diluted
207,315
207,062
0.1
%
________________________________________
1
Includes a $20.9 million LIFO credit in the three months ended March 31, 2021. Includes a $23.9 million LIFO expense, a $0.1 million gain from antitrust litigation settlements, and $5.0 million of PharMEDium shutdown costs in the three months ended March 31, 2020.
2
Includes $27.5 million of PharMEDium shutdown costs and a $12.2 million adjustment to Profarma's estimate of contingent consideration related to the purchase price of one of its prior business acquisitions in the three months ended March 31, 2020.
3
Includes a $17.1 million legal accrual for estimated costs related to injunctive relief terms associated with our Multidistrict Litigation opioid settlement discussions, $24.9 million of legal fees in connection with opioid lawsuits and investigations, and $36.2 million of other costs in connection with acquisition-related deal and integration costs, business transformation efforts, and other restructuring initiatives in the three months ended March 31, 2021. Includes $25.0 million of employee severance, $30.8 million of litigation costs related to legal fees in connection with opioid lawsuits and investigations, and $11.9 million of other costs in connection with business transformation efforts, other restructuring initiatives, and acquisition-related deal and integration costs in the three months ended March 31, 2020.
4
Includes a $21.4 million loss on the currency remeasurement of the deferred tax assets relating to Swiss tax reform in the three months ended March 31, 2021.
5
Includes $2.7 million of expense relating to Swiss tax reform in the three months ended March 31, 2021. Includes $741.0 million of discrete tax benefits primarily attributable to the income tax deductions resulting from the permanent shutdown of the PharMEDium business in the three months ended March 31, 2020.
AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)
Six Months Ended March 31, 2021
% of Revenue
Six Months Ended March 31, 2020
% of Revenue
% Change
Revenue
$
101,670,727
$
95,282,381
6.7
%
Cost of goods sold
98,685,116
92,663,060
6.5
%
Gross profit 1
2,985,611
2.94
%
2,619,321
2.75
%
14.0
%
Operating expenses:
Distribution, selling, and administrative 2
1,465,149
1.44
%
1,379,366
1.45
%
6.2
%
Depreciation and amortization
200,350
0.20
%
198,310
0.21
%
1.0
%
Employee severance, litigation, and other 3
148,537
107,041
Impairment of PharMEDium assets
—
361,652
Total operating expenses
1,814,036
1.78
%
2,046,369
2.15
%
(11.4
)%
Operating income
1,171,575
1.15
%
572,952
0.60
%
104.5
%
Other loss, net 4
9,042
1,733
Interest expense, net
68,140
65,428
4.1
%
Income before income taxes
1,094,393
1.08
%
505,791
0.53
%
116.4
%
Income tax expense (benefit) 5
281,681
(651,888
)
Net income
812,712
0.80
%
1,157,679
1.21
%
(29.8
)%
Net income attributable to noncontrolling interests
(2,600
)
(9,762
)
Net income attributable to AmerisourceBergen Corporation
$
810,112
0.80
%
$
1,147,917
1.20
%
(29.4
)%
Earnings per share:
Basic
$
3.96
$
5.58
(29.0
)%
Diluted
$
3.91
$
5.54
(29.4
)%
Weighted average common shares outstanding:
Basic
204,804
205,693
(0.4
)%
Diluted
207,063
207,293
(0.1
)%
________________________________________
1
Includes a $46.6 million LIFO credit in the six months ended March 31, 2021. Includes a $37.1 million LIFO expense, an $8.5 million gain from antitrust litigation settlements, and $12.1 million of PharMEDium shutdown and remediation costs in the six months ended March 31, 2020.
2
Includes $36.5 million of PharMEDium shutdown and remediation costs and a $12.2 million adjustment to Profarma's estimate of contingent consideration related to the purchase price of one of its prior business acquisitions in the six months ended March 31, 2020.
3
Includes a $17.1 million legal accrual for estimated costs related to injunctive relief terms associated with our Multidistrict Litigation opioid settlement discussions, $56.9 million of litigation and opioid-related costs related to legal fees in connection with opioid lawsuits and investigations, and $74.5 million of other costs in connection with acquisition-related deal and integration costs, business transformation efforts, and other restructuring initiatives in the six months ended March 31, 2021. Includes $25.8 million of employee severance, $55.5 million of litigation costs related to legal fees in connection with opioid lawsuits and investigations, and $25.7 million of other costs in connection with business transformation efforts, other restructuring initiatives, and acquisition-related deal and integration costs in the six months ended March 31, 2020.
4
Includes a $7.3 million loss on the currency remeasurement of the deferred tax assets relating to Swiss tax reform in the six months ended March 31, 2021.
5
Includes $55.0 million of expense relating to Swiss tax reform and $20.4 million of discrete tax benefits primarily attributable to the income tax deductions resulting from the permanent shutdown of the PharMEDium business in the six months ended March 31, 2021. Includes $741.0 million of discrete tax benefits primarily attributable to the income tax deductions resulting from the permanent shutdown of the PharMEDium business in the six months ended March 31, 2020.
AMERISOURCEBERGEN CORPORATION
GAAP TO NON-GAAP RECONCILIATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended March 31, 2021
Gross Profit
Operating Expenses
Operating Income
Income Before Income Taxes
Income Tax Expense
Net Loss Attributable to Noncontrolling Interests
Net Income Attributable to ABC
Diluted Earnings Per Share
GAAP
$
1,533,381
$
909,034
$
624,347
$
566,511
$
132,506
$
1,262
$
435,267
$
2.10
LIFO credit
(20,918
)
—
(20,918
)
(20,918
)
(4,957
)
—
(15,961
)
(0.08
)
Acquisition-related intangibles amortization
—
(24,973
)
24,973
24,973
3,302
(437
)
21,234
0.10
Employee severance, litigation, and other 1
—
(78,156
)
78,156
78,156
18,494
—
59,662
0.29
Tax reform 2
—
—
—
21,368
(2,701
)
—
24,069
0.12
Adjusted Non-GAAP
$
1,512,463
$
805,905
$
706,558
$
670,090
$
146,644
$
825
$
524,271
$
2.53
Adjusted Non-GAAP % change vs. prior year
6.7
%
8.1
%
5.2
%
5.0
%
6.9
%
5.4
%
5.4
%
Percentages of Revenue:
GAAP
Adjusted Non-GAAP
Gross profit
3.12
%
3.08
%
Operating expenses
1.85
%
1.64
%
Operating income
1.27
%
1.44
%
________________________________________
1
Includes a $17.1 million legal expense accrual for estimated costs associated with the injunctive relief terms of the potential framework that is part of the advanced discussions to reach a global settlement of the Multidistrict Litigation and related state-court opioid litigation.
2
Includes tax expense relating to Swiss tax reform and a loss on the currency remeasurement of the related deferred tax assets, which is recorded within Other Loss (Income).
Note: For more information related to non-GAAP financial measures, refer to the section titled "Supplemental Information Regarding Non-GAAP Financial Measures" of this release.
AMERISOURCEBERGEN CORPORATION
GAAP TO NON-GAAP RECONCILIATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended March 31, 2020
Gross Profit
Operating Expenses
Operating Income
Income Before Income Taxes
Income Tax (Benefit) Expense
Net Income Attributable to Noncontrolling Interests
Net Income Attributable to ABC
Diluted Earnings Per Share
GAAP
$
1,388,107
$
1,078,592
$
309,515
$
276,203
$
(694,908
)
$
(10,834
)
$
960,277
$
4.64
Gain from antitrust litigation settlements
(54
)
—
(54
)
(54
)
(111
)
—
57
—
LIFO expense
23,853
—
23,853
23,853
5,972
—
17,881
0.09
PharMEDium shutdown costs
4,989
(27,481
)
32,470
32,470
8,107
—
24,363
0.12
Acquisition-related intangibles amortization
—
(26,670
)
26,670
26,670
6,894
(435
)
19,341
0.09
Employee severance, litigation, and other
—
(67,732
)
67,732
67,732
16,978
—
50,754
0.25
Impairment of PharMEDium assets
—
(223,652
)
223,652
223,652
56,156
—
167,496
0.81
Contingent consideration adjustment
—
12,153
(12,153
)
(12,153
)
(2,965
)
7,511
(1,677
)
(0.01
)
Certain discrete tax benefits 1
—
—
—
—
741,015
—
(741,015
)
(3.58
)
Adjusted Non-GAAP
$
1,416,895
$
745,210
$
671,685
$
638,373
$
137,138
$
(3,758
)
$
497,477
$
2.40
2
Percentages of Revenue:
GAAP
Adjusted
Non-GAAP
Gross profit
2.93%
2.99%
Operating expenses
2.27%
1.57%
Operating income
0.65%
1.42%
________________________________________
1
Represents discrete tax benefits primarily attributable to the income tax deductions resulting from the permanent shutdown of the PharMEDium business.
2
The sum of the components does not equal the total due to rounding.
Note: For more information related to non-GAAP financial measures, refer to the section titled "Supplemental Information Regarding Non-GAAP Financial Measures" of this release.
AMERISOURCEBERGEN CORPORATION
GAAP TO NON-GAAP RECONCILIATIONS
(in thousands, except per share data)
(unaudited)
Six Months Ended March 31, 2021
Gross Profit
Operating Expenses
Operating Income
Income Before Income Taxes
Income Tax Expense
Net Income Attributable to Noncontrolling Interests
Net Income Attributable to ABC
Diluted Earnings Per Share
GAAP
$
2,985,611
$
1,814,036
$
1,171,575
$
1,094,393
$
281,681
$
(2,600
)
$
810,112
$
3.91
LIFO credit
(46,645
)
—
(46,645
)
(46,645
)
(9,933
)
—
(36,712
)
(0.18
)
Acquisition-related intangibles amortization
—
(50,007
)
50,007
50,007
7,398
(874
)
41,735
0.20
Employee severance, litigation, and other 1
—
(148,537
)
148,537
148,537
30,468
—
118,069
0.57
Certain discrete tax benefits 2
—
—
—
—
20,425
—
(20,425
)
(0.10
)
Tax reform 3
—
—
—
7,329
(55,019
)
—
62,348
0.30
Adjusted Non-GAAP
$
2,938,966
$
1,615,492
$
1,323,474
$
1,253,621
$
275,020
$
(3,474
)
$
975,127
$
4.71
4
Adjusted Non-GAAP % change vs. prior year
10.5
%
8.2
%
13.4
%
14.0
%
17.5
%
13.0
%
13.2
%
Percentages of Revenue:
GAAP
Adjusted Non-GAAP
Gross profit
2.94%
2.89%
Operating expenses
1.78%
1.59%
Operating income
1.15%
1.30%
________________________________________
1
Includes a $17.1 million legal expense accrual for estimated costs associated with the injunctive relief terms of the potential framework that is part of the advanced discussions to reach a global settlement of the Multidistrict Litigation and related state-court opioid litigation.
2
Represents discrete tax benefits primarily attributable to the income tax deductions resulting from the permanent shutdown of the PharMEDium business.
3
Includes tax expense relating to Swiss tax reform and a loss on the currency remeasurement of the related deferred tax assets, which is recorded within Other Loss (Income).
4
The sum of the components does not equal the total due to rounding.
Note: For more information related to non-GAAP financial measures, refer to the section titled "Supplemental Information Regarding Non-GAAP Financial Measures" of this release.
AMERISOURCEBERGEN CORPORATION
GAAP TO NON-GAAP RECONCILIATIONS
(in thousands, except per share data)
(unaudited)
Six Months Ended March 31, 2020
Gross Profit
Operating Expenses
Operating Income
Income Before Income Taxes
Income Tax (Benefit) Expense
Net Income Attributable to Noncontrolling Interests
Net Income Attributable to ABC
Diluted Earnings Per Share
GAAP
$
2,619,321
$
2,046,369
$
572,952
$
505,791
$
(651,888
)
$
(9,762
)
$
1,147,917
$
5.54
Gain from antitrust litigation settlements
(8,546
)
—
(8,546
)
(8,546
)
(2,085
)
—
(6,461
)
(0.03
)
LIFO expense
37,134
—
37,134
37,134
9,059
—
28,075
0.14
PharMEDium shutdown and remediation costs
12,124
(36,511
)
48,635
48,635
11,864
—
36,771
0.18
Acquisition-related intangibles amortization
—
(60,236
)
60,236
60,236
14,695
(871
)
44,670
0.22
Employee severance, litigation, and other
—
(107,041
)
107,041
107,041
26,114
—
80,927
0.39
Impairment of PharMEDium assets
—
(361,652
)
361,652
361,652
88,227
—
273,425
1.32
Contingent consideration adjustment
—
12,153
(12,153
)
(12,153
)
(2,965
)
7,511
(1,677
)
(0.01
)
Certain discrete tax benefits 1
—
—
—
—
741,015
—
(741,015
)
(3.57
)
Adjusted Non-GAAP
$
2,660,033
$
1,493,082
$
1,166,951
$
1,099,790
$
234,036
$
(3,122
)
$
862,632
$
4.16
2
Percentages of Revenue:
GAAP
Adjusted Non-GAAP
Gross profit
2.75%
2.79%
Operating expenses
2.15%
1.57%
Operating income
0.60%
1.22%
________________________________________
1
Represents discrete tax benefits primarily attributable to the income tax deductions resulting from the permanent shutdown of the PharMEDium business.
2
The sum of the components does not equal the total due to rounding.
Note: For more information related to non-GAAP financial measures, refer to the section titled "Supplemental Information Regarding Non-GAAP Financial Measures" of this release.
AMERISOURCEBERGEN CORPORATION
SUMMARY SEGMENT INFORMATION
(dollars in thousands)
(unaudited)
Three Months Ended March 31,
Revenue
2021
2020
% Change
Pharmaceutical Distribution Services
$
47,101,331
$
45,562,670
3.4
%
Other
2,092,772
1,876,593
11.5
%
Intersegment eliminations
(39,932
)
(21,624
)
Revenue
$
49,154,171
$
47,417,639
3.7
%
Three Months Ended March 31,
Operating income
2021
2020
% Change
Pharmaceutical Distribution Services
$
589,033
$
563,097
4.6
%
Other
123,180
108,260
13.8
%
Intersegment eliminations
(5,655
)
328
Total segment operating income
706,558
671,685
5.2
%
Gain from antitrust litigation settlements
—
54
LIFO credit (expense)
20,918
(23,853
)
PharMEDium shutdown costs
—
(32,470
)
Acquisition-related intangibles amortization
(24,973
)
(26,670
)
Employee severance, litigation, and other
(78,156
)
(67,732
)
Impairment of PharMEDium assets
—
(223,652
)
Contingent consideration adjustment
—
12,153
Operating income
$
624,347
$
309,515
Percentages of revenue:
Pharmaceutical Distribution Services
Gross profit
2.39
%
2.32
%
Operating expenses
1.14
%
1.08
%
Operating income
1.25
%
1.24
%
Other
Gross profit
18.81
%
19.15
%
Operating expenses
12.92
%
13.38
%
Operating income
5.89
%
5.77
%
AmerisourceBergen Corporation (GAAP)
Gross profit
3.12
%
2.93
%
Operating expenses
1.85
%
2.27
%
Operating income
1.27
%
0.65
%
AmerisourceBergen Corporation (Non-GAAP)
Adjusted gross profit
3.08
%
2.99
%
Adjusted operating expenses
1.64
%
1.57
%
Adjusted operating income
1.44
%
1.42
%
Note: For more information related to non-GAAP financial measures, refer to the section titled "Supplemental Information Regarding Non-GAAP Financial Measures" of this release.
AMERISOURCEBERGEN CORPORATIONSUMMARY SEGMENT INFORMATION
(dollars in thousands)
(unaudited)
Six Months Ended March 31,
Revenue
2021
2020
% Change
Pharmaceutical Distribution Services
$
97,593,841
$
91,599,498
6.5
%
Other
4,145,046
3,723,577
11.3
%
Intersegment eliminations
(68,160
)
(40,694
)
Revenue
$
101,670,727
$
95,282,381
6.7
%
Six Months Ended March 31,
Operating income
2021
2020
% Change
Pharmaceutical Distribution Services
$
1,085,100
$
954,791
13.6
%
Other
244,827
212,739
15.1
%
Intersegment eliminations
(6,453
)
(579
)
Total segment operating income
1,323,474
1,166,951
13.4
%
Gain from antitrust litigation settlements
—
8,546
LIFO credit (expense)
46,645
(37,134
)
PharMEDium shutdown and remediation costs
—
(48,635
)
Acquisition-related intangibles amortization
(50,007
)
(60,236
)
Employee severance, litigation, and other
(148,537
)
(107,041
)
Impairment of PharMEDium assets
—
(361,652
)
Contingent consideration adjustment
—
12,153
Operating income
$
1,171,575
$
572,952
Percentages of revenue:
Pharmaceutical Distribution Services
Gross profit
2.22
%
2.13
%
Operating expenses
1.11
%
1.09
%
Operating income
1.11
%
1.04
%
Other
Gross profit
18.84
%
19.08
%
Operating expenses
12.94
%
13.37
%
Operating income
5.91
%
5.71
%
AmerisourceBergen Corporation (GAAP)
Gross profit
2.94
%
2.75
%
Operating expenses
1.78
%
2.15
%
Operating income
1.15
%
0.60
%
AmerisourceBergen Corporation (Non-GAAP)
Adjusted gross profit
2.89
%
2.79
%
Adjusted operating expenses
1.59
%
1.57
%
Adjusted operating income
1.30
%
1.22
%
Note: For more information related to non-GAAP financial measures, refer to the section titled "Supplemental Information Regarding Non-GAAP Financial Measures" of this release.
AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
March 31,
September 30,
2021
2020
ASSETS
Current assets:
Cash and cash equivalents
$
6,641,180
$
4,597,746
Accounts receivable, net
14,134,326
13,846,301
Inventories
12,954,676
12,589,278
Right to recover assets
1,217,032
1,344,649
Income tax receivable
331,291
488,428
Prepaid expenses and other
190,644
189,300
Total current assets
35,469,149
33,055,702
Property and equipment, net
1,482,753
1,484,808
Goodwill and other intangible assets
8,548,906
8,592,826
Deferred income taxes
302,554
361,640
Other long-term assets
1,199,888
779,854
Total assets
$
47,003,250
$
44,274,830
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable
$
31,420,390
$
31,705,055
Other current liabilities
1,532,171
1,646,763
Short-term debt
43,885
501,259
Total current liabilities
32,996,446
33,853,077
Long-term debt
6,147,112
3,618,261
Accrued income taxes
273,031
284,845
Deferred income taxes
768,551
686,485
Other long-term liabilities
708,174
472,855
Accrued litigation liability
6,212,718
6,198,943
Total deficit
(102,782
)
(839,636
)
Total liabilities and stockholders' deficit
$
47,003,250
$
44,274,830
AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended March 31,
2021
2020
Operating Activities:
Net income
$
812,712
$
1,157,679
Adjustments to reconcile net income to net cash provided by operating activities 1
415,159
643,981
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Accounts receivable
(193,770
)
(2,052,216
)
Inventories
(314,294
)
(152,359
)
Accounts payable
(292,555
)
2,395,847
Other, net 2
21,898
(997,225
)
Net cash provided by operating activities
449,150
995,707
Investing Activities:
Capital expenditures
(151,612
)
(144,382
)
Cost of equity investments
(162,620
)
(30,580
)
Other, net
—
7,162
Net cash used in investing activities
(314,232
)
(167,800
)
Financing Activities:
Net borrowings 3
2,069,645
947
Purchases of common stock 4
(82,150
)
(407,152
)
Exercises of stock options
130,326
76,757
Cash dividends on common stock
(182,365
)
(170,541
)
Other
(26,940
)
(10,174
)
Net cash provided by (used in) financing activities
1,908,516
(510,163
)
Increase in cash and cash equivalents
2,043,434
317,744
Cash and cash equivalents at beginning of period
4,597,746
3,374,194
Cash and cash equivalents at end of period
$
6,641,180
$
3,691,938
________________________________________
1
Includes a $361.7 million impairment of PharMEDium assets in the six months ended March 31, 2020.
2
Includes a $693.6 million increase in income tax receivable for the six months ended March 31, 2020 primarily as a result of recognizing certain discrete tax benefits.
3
Includes proceeds from the issuance of the Company's $1,525 million of 0.737% senior notes and $1,000 million of 2.700% senior notes that will be used to finance a portion of the acquisition of a majority of WBA's Alliance Healthcare businesses.
4
Purchases of common stock in the six months ended March 31, 2020 includes $14.8 million of September 2019 purchases that cash settled in October 2019.
SUPPLEMENTAL INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES
To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses the non-GAAP financial measures described below. The non-GAAP financial measures should be viewed in addition to, and not in lieu of, financial measures calculated in accordance with GAAP. These supplemental measures may vary from, and may not be comparable to, similarly titled measures by other companies.
The non-GAAP financial measures are presented because management uses non-GAAP financial measures to evaluate the Company’s operating performance, to perform financial planning, and to determine incentive compensation. Therefore, the Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. The presented non-GAAP financial measures exclude items that management does not believe reflect the Company’s core operating performance because such items are outside the control of the Company or are inherently unusual, non-operating, unpredictable, non-recurring, or non-cash. We have included the following non-GAAP earnings-related financial measures in this release:
In addition, the Company updated its non-GAAP fiscal year 2021 guidance for diluted earnings per share, operating expense and operating income and has previously provided non-GAAP fiscal year 2021 guidance for effective income tax rate. The guidance for each metric excludes the same or similar items as those that are excluded from the historical non-GAAP financial measures, as well as significant items that are outside the control of the Company or inherently unusual, non-operating, unpredictable, non-recurring or non-cash in nature. In addition, it has previously provided fiscal year 2021 adjusted free cash flow guidance. For fiscal year 2021, we have defined the non-GAAP financial measure of adjusted free cash flow as net cash provided by operating activities, excluding other significant unpredictable or non-recurring cash payments or receipts relating to legal settlements, minus capital expenditures. For the six months ended March 31, 2021 adjusted free cash flow of $297.5 million consisted of net cash provided by operating activities of $449.2 million minus capital expenditures of $151.6 million. The Company does not provide forward looking guidance on a GAAP basis for such metrics because certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated. For example, LIFO expense (credit) is largely dependent upon the future inflation or deflation of brand and generic pharmaceuticals, which is out of the Company’s control, and acquisition-related intangibles amortization depends on the timing and amount of future acquisitions, which cannot be reasonably estimated. Similarly, the timing and amount of litigation settlements is unpredictable and non-recurring.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210505005225/en/
Bennett S. Murphy Senior Vice President, Investor Relations 610-727-3693 bmurphy@amerisourcebergen.com
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