Full Press Release Details
| AmerisourceBergen Corporation | |
| 1 West First Avenue | |
| Conshohocken, PA 19428 |
AMERISOURCEBERGEN REPORTS
FISCAL 2021 SECOND QUARTER RESULTS
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
CONSHOHOCKEN, PA, May 5, 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
Revenue In the second quarter of fiscal 2021, revenue was $49.2 billion, up 3.7 percent compared to the same quarter in the previous fiscal year, reflecting a 3.4 percent increase in Pharmaceutical Distribution Services revenue and an 11.5 percent increase in revenue within Other.
Gross Profit Gross profit in the second quarter of fiscal 2021 was $1.5 billion, a 10.5 percent increase compared to the same period in the previous fiscal year. Gross profit was favorably impacted by an increase in gross profit for Pharmaceutical Distribution Services, a LIFO credit in the current year quarter in comparison to a LIFO expense in the prior year quarter, and an increase in gross profit for Other. Gross profit as a percentage of revenue was 3.12%, an increase of 19 basis points from the prior year quarter primarily driven by an increase in sales of specialty products in Pharmaceutical Distribution Services and growth in some of the Company's higher margin businesses.
Operating Expenses In the second quarter of fiscal 2021, operating expenses were $909.0 million, a 15.7 percent decrease compared to the same period last fiscal year. The decrease in operating expenses was primarily due to the $223.7 million impairment of PharMEDium assets recorded in the prior year quarter, which was partially offset by an increase in distribution, selling and administrative costs in the current year quarter. Operating expenses as a percentage of revenue in the fiscal 2021 second quarter were 1.85 percent, compared to 2.27 percent for the same period in the previous fiscal year.
Operating Income In the fiscal 2021 second quarter, operating income increased to $624.3 million from $309.5 million in the prior year quarter. Operating income as a percentage of revenue was 1.27 percent in the second quarter of fiscal 2021, compared to 0.65 percent for the same period in the previous fiscal year due to the increase in gross profit and decrease in operating expenses.
Interest Expense, Net In the fiscal 2021 second quarter, net interest expense of $34.5 million was up 0.3 percent versus the prior year quarter due to a decrease in interest income resulting primarily from a decline in investment interest rates, which was largely offset by lower interest expense.
Effective Tax Rate The effective tax rate was 23.4 percent for the second quarter of fiscal 2021 compared to (251.6) percent in the prior year quarter which was favorably impacted by tax benefits related to the Company's decision to permanently exit the PharMEDium compounding business in January 2020.
Diluted Earnings Per Share Diluted earnings per share was $2.10 in the second quarter of fiscal 2021 compared to $4.64 in the previous fiscal year's second quarter. The decrease was primarily due to discrete tax benefits recognized in the prior year period.
Diluted Shares Outstanding Diluted weighted average shares outstanding for the second quarter of fiscal 2021 were 207.3 million, a 0.1 percent increase versus the prior fiscal year second quarter.
Second Quarter Adjusted (non-GAAP) Results
Revenue No adjustments were made to the GAAP presentation of revenue. In the second quarter of fiscal 2021, revenue was $49.2 billion, up 3.7 percent compared to the same quarter in the previous fiscal year, reflecting a 3.4 percent increase in Pharmaceutical Distribution Services revenue and an 11.5 percent increase in revenue within Other.
Adjusted Gross Profit Adjusted gross profit in the fiscal 2021 second quarter was $1.5 billion, which was up 6.7 percent compared to the same period in the previous year due to increases in gross profit in Pharmaceutical Distribution Services and Other. Adjusted gross profit as a percentage of revenue was 3.08 percent in the fiscal 2021 second quarter, an increase of 9 basis points when compared to the prior year quarter primarily driven by an increase in sales of specialty products in Pharmaceutical Distribution Services and growth in some of the Company's higher margin businesses.
Adjusted Operating Expenses In the second quarter of fiscal 2021, adjusted operating expenses were $805.9 million, an increase of 8.1 percent compared to the same period in the previous fiscal year due to higher distribution, selling, and administrative expenses primarily due to an increase in payroll-related operating costs to support the Company's current and future revenue growth. Adjusted operating expenses as a percentage of revenue in the fiscal 2021 second quarter was 1.64 percent, an increase of 7 basis points when compared to the prior year quarter.
Adjusted Operating Income In the fiscal 2021 second quarter, adjusted operating income of $706.6 million increased 5.2 percent from the prior year period due to a 4.6 percent increase in Pharmaceutical Distribution Services' operating income and a 13.8 percent increase in operating income within Other. Adjusted operating income as a percentage of revenue was 1.44 percent in the fiscal 2021 second quarter, an increase of 2 basis points when compared to the prior year quarter.
Interest Expense, Net No adjustments were made to the GAAP presentation of net interest expense. In the fiscal 2021 second quarter, net interest expense of $34.5 million was up 0.3 percent versus the prior year quarter due to a decrease in interest income resulting primarily from a decline in investment interest rates, which was largely offset by lower interest expense.
Adjusted Effective Tax Rate The adjusted effective tax rate was 21.9 percent for the second quarter of fiscal 2021 compared to 21.5 percent in the prior year quarter.
Adjusted Diluted Earnings Per Share Adjusted diluted earnings per share was up 5.4 percent to $2.53 in the second quarter of fiscal 2021 compared to $2.40 in the previous fiscal year's second quarter, driven by the increase in adjusted operating income.
Diluted Shares Outstanding No adjustments were made to the GAAP presentation of diluted shares outstanding. Diluted weighted average shares outstanding for the second quarter of fiscal 2021 were 207.3 million, a 0.1 percent increase versus the prior fiscal year second quarter.
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.
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
AmerisourceBergen released its 2020 Global Sustainability Report and ESG Reporting Index, detailing the impact of its robust sustainability and community efforts. This year, AmerisourceBergen made its report available through the launch of a new microsite, which serves as a comprehensive, interactive resource to showcase data, information and relevant assets from the Company in connection with topics related to ESG. For the third year in a row, selected information within the 2020 report was assured by ERM Certification and Verification Services.
The Anti-Defamation League (ADL) Philadelphia chapter presented the Americanism Award to Steven H. Collis, Chairman, President CEO, and AmerisourceBergen for their commitment to fighting hate locally, across the country and the world. The Americanism Award has honored leaders in business, community affairs and charitable endeavors who distinguish themselves and their organizations through their dedication to preserving liberty and advancing the cause of human rights, respect, dignity and equal opportunity.
The AmerisourceBergen Foundation, an independent not-for-profit charitable giving organization focused on supporting health-related causes that enrich the global community, announced a $700,000 donation to Boys Girls Clubs of America to support COVID-19 vaccine education and awareness in an effort to remove barriers to vital healthcare access.
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
Adjusted Diluted EPS to be in the range of $8.45 to $8.60, raised from the previous range of $8.40 to $8.60.
Additional expectations now include
Adjusted operating expense growth in the high-single digit percent range, narrowed from the mid- to high-single digit percent range
Other, which is comprised of our Global Commercialization Services Animal Health businesses, operating income growth in the low-double digit percent range, up from the mid- to high-single digit percent range
Weighted average shares to be between 207 million and 208 million, raised from the previous expectation of approximately 207 million for the fiscal year.
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
Steven H. Collis, Chairman, President Chief Executive Officer
James F. Cleary, Executive Vice President Chief Financial Officer
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
(In thousands, except per share data)
| 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
(In thousands, except per share data)
| 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)
| 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)
| 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% |
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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)