Full Press Release Details
| AmerisourceBergen Corporation | |
| P.O. Box 959 | |
| Valley Forge, PA 19482 |
AMERISOURCEBERGEN REPORTS
FISCAL 2018 FOURTH QUARTER AND YEAR END RESULTS
Revenues of $43.3 Billion for the Fourth Quarter, a 10.7 Percent Increase Year-Over-Year
Fourth Quarter GAAP Diluted EPS of $1.07 and Adjusted Diluted EPS of $1.45
Revenues of $167.9 Billion for Fiscal Year 2018, a 9.7% Increase Year-Over-Year
Fiscal Year 2018 GAAP Diluted EPS of $7.53 and Adjusted Diluted EPS of $6.49
The Board of Directors Authorized a New $1.0 Billion Share Repurchase Program
The Board of Directors Increased the Quarterly Dividend Rate by 5% to $0.40 per share
VALLEY FORGE, PA, November 6, 2018 - AmerisourceBergen Corporation (NYSE:ABC) today reported that in its fiscal year 2018 fourth quarter ended September 30, 2018, revenue increased 10.7 percent to $43.3 billion. Revenue increased 9.7 percent to $167.9 billion for the fiscal year. On the basis of U.S. generally accepted accounting principles (GAAP), diluted earnings per share (EPS) was $1.07 for the September quarter of fiscal 2018, compared to a loss of $1.58 in the prior year quarter. GAAP diluted EPS for the fiscal year was $7.53, compared to $1.64 in the prior year. Adjusted diluted EPS, which is a non-GAAP measure that excludes items described below, increased 9.0 percent to $1.45 in the fiscal year 2018 fourth quarter. For fiscal year 2018, adjusted diluted EPS increased 10.4 percent to $6.49.
"In fiscal year 2018, AmerisourceBergen delivered solid performance even as two of our business units work through some challenges. We had a fantastic year of growth in specialty distribution, successfully integrated H. D. Smith, seamlessly onboarded the Rite Aid stores acquired by Walgreens and continued to deepen relationships with our customers throughout the company. Our innovative services and solutions provide our partners with access to a state-of-the-art distribution network and best-in-class customer experience offerings, enabling manufacturers and providers to operate more effectively and efficiently," said Steven H. Collis, Chairman, President and Chief Executive Officer of AmerisourceBergen.
Today, the Company's Board of Directors declared a quarterly dividend of $0.40 per common share, a 5% increase in its quarterly dividend rate from $0.38 per common share. The quarterly dividend of $0.40 per common share will be payable December 3, 2018, to stockholders of record at the close of business on November 19, 2018.
"Our Board of Directors authorized a new $1.0 billion share repurchase program and a 5% increase in our dividend as part of our ongoing commitment to return capital to shareholders," said Mr. Collis.
"We are pleased with the ability of our associates to collaborate, innovate and execute, enabling AmerisourceBergen to deliver long-term value. Our outlook for fiscal 2019 reflects the strength of our business despite ongoing challenges at PharMEDium," Mr. Collis continued. "Our differentiated strategy, long-term partnerships, leadership in specialty distribution and services, innovative services and solutions and strong financial stewardship, position AmerisourceBergen to continue to build long-term sustainable growth and deliver on our purpose of being united in our responsibility to create healthier futures."
Fourth Quarter Fiscal Year 2018 Summary Results
| GAAP | Adjusted (Non-GAAP) | |
| Revenue | $43.3B | $43.3B |
| Gross Profit | $1.0B | $1.2B |
| Operating Expenses | $879M | $732M |
| Operating Income | $154M | $432M |
| Interest Expense, Net | $43M | $43M |
| Tax Rate | (73.4)% | 19.6% |
| Net Income Attributable to ABC | $233M | $315M |
| Diluted Shares Outstanding | 217M | 217M |
| Diluted Earnings Per Share | $1.07 | $1.45 |
Below, AmerisourceBergen presents descriptive summaries of the Company's GAAP quarterly results as well as its 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 our fiscal year 2019 expectations, please refer to the Supplemental Information Regarding Non-GAAP Financial Measures following the tables.
Fourth Quarter GAAP Quarterly Results
Definition of Adjusted (Non-GAAP) Results
The comments below compare adjusted results, which exclude:
In addition, we previously issued $600 million of 1.15 percent senior notes that were repaid in May 2017 to fund our initial special share repurchase program to mitigate the dilutive effect of the Warrants. The interest expense incurred relating to this borrowing has been excluded from the Non-GAAP presentation.
Fourth Quarter Adjusted (Non-GAAP) Results
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 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 $41.7 billion, an increase of 10.8 percent compared to the same quarter in the prior fiscal year, primarily due to growth of some of its largest customers, overall market growth, and especially strong oncology product sales. In addition, revenue increased in the current quarter due to the January 2018 acquisition of H. D. Smith and the January 2018 consolidation of Profarma. Segment operating income of $357 million in the September quarter of fiscal 2018 was down 10.7 percent compared to the same period in the previous fiscal year, primarily due to lower sales at PharMEDium.
Revenue in Other was $1.6 billion in the fourth quarter of fiscal 2018, an increase of 7.9 percent compared to the same period in the prior fiscal year, primarily due to the consolidation of the specialty joint venture in Brazil and ABCS's growth in its Canadian operations. Operating income in Other increased 5.2 percent to $75 million in the fourth quarter of fiscal 2018, primarily due to increased contributions from MWI, World Courier and ABCS's Xcenda, and was partially offset by a lower contribution from ABCS's Lash Group.
Fiscal Year 2018 Summary Results
| GAAP | Adjusted (Non-GAAP) | |
| Revenue | $167.9B | $167.9B |
| Gross Profit | $4.6B | $4.7B |
| Operating Expenses | $3.2B | $2.7B |
| Operating Income | $1.4B | $2.0B |
| Interest Expense, Net | $175M | $175M |
| Tax Rate | (37.2)% | 21.3% |
| Net Income Attributable to ABC | $1.7B | $1.4B |
| Diluted Shares Outstanding | 220M | 220M |
| Diluted Earnings Per Share | $7.53 | $6.49 |
Summary Fiscal Year GAAP Results
In fiscal year 2018, GAAP diluted EPS was $7.53, compared to $1.64 in the prior year. Revenue of $167.9 billion was up 9.7 percent over the last fiscal year. Gross profit increased 1.5 percent to $4.6 billion primarily due to increases in Pharmaceutical Distribution Services and Other, and was partially offset by an increase in LIFO expense. Operating expenses decreased 9.1 percent over the last fiscal year primarily due to the decrease in litigation settlements and accruals. Operating income increased 36.2 percent and operating income margin increased 17 basis points in the current fiscal year. Diluted weighted average shares outstanding in fiscal 2018 were 220.3 million, down 0.6 percent from the prior fiscal year.
Summary Fiscal Year Adjusted (Non-GAAP) Results
In fiscal year 2018, adjusted diluted EPS was $6.49, an increase of 10.4 percent over the prior fiscal year primarily due to a lower adjusted effective tax rate. Adjusted diluted weighted average shares outstanding in fiscal 2018 were 220.3 million, down 0.6 percent from the prior fiscal year. Revenue increased 9.7 percent from last fiscal year to $167.9 billion. Adjusted gross profit increased by $340 million, or 7.8 percent, from last fiscal year to $4.7 billion primarily due to the increase in revenue, the January 2018 consolidation of Profarma and the specialty joint venture in Brazil, and the January 2018 acquisition of H. D. Smith, offset in part by a lower contribution from PharMEDium. Adjusted operating income decreased 1.8 percent as the increase in
adjusted operating expenses of $376 million exceeded the increase in adjusted gross profit. Adjusted operating income margin decreased 14 basis points from 1.32 percent to 1.18 percent.
Recent Company Highlights & Milestones
Fiscal Year 2019 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 and cannot be reasonably estimated. Please refer to the Supplemental Information Regarding Non-GAAP Financial Measures following the tables for additional information.
Fiscal Year 2019 Expectations on an Adjusted (Non-GAAP) Basis
AmerisourceBergen has introduced its fiscal year 2019 financial guidance which reflects strong growth in Global Commercialization Services and Animal Health and growth in Pharmaceutical Distribution Services, even with continued production limitations at PharMEDium. The Company's range of expectations incorporates three scenarios for PharMEDium
production, including a potential sizable headwind from the business unit in fiscal year 2019. Please note that guidance includes the consolidation of Profarma and the Specialty Joint Venture in Brazil. The Company expects:
Additional assumptions include:
Conference Call & Slide Presentation
The Company will host a conference call to discuss the results at 8:30 a.m. ET on November 6, 2018. A slide presentation for investors has also been posted on the Investors page of the AmerisourceBergen website at investor.amerisourcebergen.com. Participating in the conference call will be:
Steven H. Collis, Chairman, President & Chief Executive Officer
Tim G. Guttman, Executive Vice President & Chief Financial Officer
James F. Cleary, Jr., Executive Vice President & incoming Chief Financial Officer
The dial-in number for the live call will be (612) 326-1011. 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 www.amerisourcebergen.com approximately two hours after the completion of the call and will remain available for 30 days. The telephone replay will also be available approximately two hours after the completion of the call and will remain available for seven days. To access the telephone replay from within the U.S., dial (800) 475-6701. From outside the U.S., dial (320) 365-3844. The access code for the replay is 454961.
Upcoming Investor Events
AmerisourceBergen management will be attending the following investor conferences in the coming months:
Please check the website for updates regarding the timing of the live presentation webcasts, if any, and for replay information.
About AmerisourceBergen
AmerisourceBergen provides pharmaceutical products, value-driving services and business solutions that improve access to care. Tens of thousands of healthcare providers, veterinary practices and livestock producers trust us as their partner in the pharmaceutical supply chain. Global manufacturers depend on us for services that drive commercial success for their products. Through our daily work-and powered by our 21,000 associates-we are united in our responsibility to create healthier futures. AmerisourceBergen is ranked #12 on the Fortune 500, with more than $160 billion in annual revenue. The company is headquartered in Valley Forge, Pa. and has a presence in 50+ countries. 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 and Section 21E of the Securities Exchange Act of 1934. 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 change in circumstances. These statements are not guarantees of future performance and are based on assumptions that could prove incorrect or could cause actual results to vary materially from those indicated. Among the factors that could cause actual results to differ materially from those projected, anticipated, or implied are the following: 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 pharmaceutical market growth rates; 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 and pharmaceutical compounding; declining reimbursement rates for pharmaceuticals; federal and state government enforcement initiatives to detect and prevent suspicious orders of controlled substances and the diversion of controlled substances; increased public concern over the abuse of opioid medications; prosecution or suit by federal, state and other governmental entities of alleged violations of laws and regulations regarding controlled substances, 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; 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; risks associated with the strategic, long-term relationship between Walgreens Boots Alliance, Inc. and the Company, including principally with respect to the pharmaceutical distribution agreement and/or the global generic purchasing services arrangement; 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; regulatory action in connection with the production, labeling or packaging of products compounded by our compounded sterile preparations (CSP) business; suspension of production of CSPs, including continued suspension at our Memphis facility; managing foreign expansion, including non-compliance with the U.S. Foreign Corrupt Practices Act, anti-bribery laws and economic sanctions and import laws and regulations; financial market volatility and disruption; substantial defaults in payment, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; the loss, bankruptcy or insolvency of a major supplier; 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 that affect the Company's operations; the impairment of goodwill or other intangible assets (including with respect to foreign operations), resulting in a charge to earnings; the acquisition of businesses that do not perform as expected, or that are difficult to integrate or control, including the integration of H. D. Smith and PharMEDium, or the inability to capture all of the anticipated synergies related thereto or to capture the anticipated synergies within the expected time period; the effects of disruption from the transactions on the respective businesses of the Company and H. D. Smith and the fact that the transactions may make it more difficult to establish or maintain relationships with employees, suppliers, customers and other business partners; 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, 2017 and elsewhere in that report and (ii) in other reports filed by the Company pursuant to the Securities Exchange Act.
AMERISOURCEBERGEN CORPORATION
(in thousands, except per share data)
| Three Months Ended September 30, 2018 | % of Revenue | Three Months Ended September 30, 2017 | % of Revenue | % Change | ||||||||||
| Revenue | $ | 43,297,136 | $ | 39,120,015 | 10.7% | |||||||||
| Cost of goods sold | 42,264,495 | 37,947,995 | 11.4% | |||||||||||
| Gross profit 1 | 1,032,641 | 2.39% | 1,172,020 | 3.00% | (11.9)% | |||||||||
| Operating expenses: | ||||||||||||||
| Distribution, selling, and administrative | 657,805 | 1.52% | 560,877 | 1.43% | 17.3% | |||||||||
| Depreciation and amortization | 120,558 | 0.28% | 104,335 | 0.27% | 15.5% | |||||||||
| Goodwill impairment charge 2 | 59,684 | - | ||||||||||||
| Employee severance, litigation, and other 3 | 40,497 | 641,810 | ||||||||||||
| Total operating expenses | 878,544 | 2.03% | 1,307,022 | 3.34% | (32.8)% | |||||||||
| Operating income (loss) | 154,097 | 0.36% | (135,002 | ) | (0.35)% | |||||||||
| Other (income) loss | (820 | ) | 1,228 | |||||||||||
| Interest expense, net | 43,047 | 35,311 | 21.9% | |||||||||||
| Income (loss) before taxes | 111,870 | 0.26% | (171,541 | ) | (0.44)% | |||||||||
| Income tax (benefit) expense | (82,134 | ) | 173,046 | |||||||||||
| Net income (loss) | 194,004 | 0.45% | (344,587 | ) | (0.88)% | |||||||||
| Net income attributable to noncontrolling interest | 39,284 | - | ||||||||||||
| Net income (loss) attributable to AmerisourceBergen Corporation | $ | 233,288 | 0.54% | $ | (344,587 | ) | (0.88)% | |||||||
| Earnings per share: | ||||||||||||||
| Basic | $ | 1.08 | $ | (1.58 | ) | |||||||||
| Diluted | $ | 1.07 | $ | (1.58 | ) | |||||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | 215,430 | 218,501 | (1.4)% | |||||||||||
| Diluted | 217,492 | 218,501 | (0.5)% |
________________________________________
2 The goodwill impairment charge is related to the Company's non-wholly owned subsidiary in Brazil.
AMERISOURCEBERGEN CORPORATION
(in thousands, except per share data)
| Fiscal Year Ended September 30, 2018 | % of Revenue | Fiscal Year Ended September 30, 2017 | % of Revenue | % Change | ||||||||||
| Revenue | $ | 167,939,635 | $ | 153,143,826 | 9.7% | |||||||||
| Cost of goods sold | 163,327,318 | 148,597,824 | 9.9% | |||||||||||
| Gross profit 1 | 4,612,317 | 2.75% | 4,546,002 | 2.97% | 1.5% | |||||||||
| Operating expenses: | ||||||||||||||
| Distribution, selling, and administrative | 2,460,301 | 1.46% | 2,128,730 | 1.39% | 15.6% | |||||||||
| Depreciation and amortization | 465,127 | 0.28% | 397,603 | 0.26% | 17.0% | |||||||||
| Goodwill impairment charge 2 | 59,684 | - | ||||||||||||
| Employee severance, litigation, and other 3 | 183,520 | 959,327 | ||||||||||||
| Total operating expenses | 3,168,632 | 1.89% | 3,485,660 | 2.28% | (9.1)% | |||||||||
| Operating income | 1,443,685 | 0.86% | 1,060,342 | 0.69% | 36.2% | |||||||||
| Other loss (income) 4 | 25,469 | (2,730 | ) | |||||||||||
| Interest expense, net | 174,699 | 145,185 | 20.3% | |||||||||||
| Loss on consolidation of equity investments | 42,328 | - | ||||||||||||
| Loss on early retirement of debt | 23,766 | - | ||||||||||||
| Income before income taxes | 1,177,423 | 0.70% | 917,887 | 0.60% | 28.3% | |||||||||
| Income tax (benefit) expense | (438,469 | ) | 553,403 | |||||||||||
| Net income | 1,615,892 | 0.96% | 364,484 | 0.24% | 343.3% | |||||||||
| Net loss attributable to noncontrolling interest | 42,513 | - | ||||||||||||
| Net income attributable to AmerisourceBergen Corporation | $ | 1,658,405 | 0.99% | $ | 364,484 | 0.24% | 355.0% | |||||||
| Earnings per share: | ||||||||||||||
| Basic | $ | 7.61 | $ | 1.67 | 355.7% | |||||||||
| Diluted | $ | 7.53 | $ | 1.64 | 359.1% | |||||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | 217,872 | 218,375 | (0.2)% | |||||||||||
| Diluted | 220,336 | 221,602 | (0.6)% |
________________________________________
1 Includes a $35.9 million gain from antitrust litigation settlements, $67.3 million LIFO expense, $61.1 million of PharMEDium remediation costs, and an estimated $22.0 million assessment relating to the New York State Stewardship Act (for the period covering January 1, 2017 through September 30, 2018) in the fiscal year ended September 30, 2018. Includes a $157.8 million LIFO credit and a $1.4 million gain from antitrust litigation settlements in the fiscal year ended September 30, 2017.
2 The goodwill impairment charge is related to the Company's non-wholly owned subsidiary in Brazil.
3 Includes $36.7 million of employee severance, $61.5 million of litigation costs primarily related to opioid lawsuits, investigations, and related initiatives, and $85.3 million of acquisition-related deal and integration costs, other costs related to business transformation efforts, and other restructuring initiatives in the fiscal year ended September 30, 2018. Includes $7.8 million of employee severance, $917.6 million for litigation settlements and accruals, and $34.0 million of other costs due to acquisition-related deal and integration costs, other restructuring initiatives, and business transformation efforts in the fiscal year ended September 30, 2017.
4 Includes a $30.0 million impairment on a non-customer note receivable in the fiscal year ended September 30, 2018.
AMERISOURCEBERGEN CORPORATION
GAAP TO NON-GAAP RECONCILIATIONS
(in thousands, except per share data)
| Three Months Ended September 30, 2018 | |||||||||||||||||||||||||||||||||
| Gross Profit | Operating Expenses | Operating Income | Income Before Income Taxes | Income Tax (Benefit) Expense | Net Loss Atrributable to Noncontrolling Interest | Net Income Attributable to ABC | Diluted Earnings Per Share | ||||||||||||||||||||||||||
| GAAP | $ | 1,032,641 | $ | 878,544 | $ | 154,097 | $ | 111,870 | $ | (82,134 | ) | $ | 39,284 | $ | 233,288 | $ | 1.07 | ||||||||||||||||
| Gain from antitrust litigation settlements | - | - | - | - | (225 | ) | - | 225 | - | ||||||||||||||||||||||||
| LIFO expense | 83,466 | - | 83,466 | 83,466 | 23,124 | - | 60,342 | 0.28 | |||||||||||||||||||||||||
| PharMEDium remediation costs | 26,580 | (1,617 | ) | 28,197 | 28,197 | 8,083 | - | 20,114 | 0.09 | ||||||||||||||||||||||||
| New York State Opioid Stewardship Act | 22,000 | - | 22,000 | 22,000 | 6,122 | - | 15,878 | 0.07 | |||||||||||||||||||||||||
| Goodwill impairment charge | - | (59,684 | ) | 59,684 | 59,684 | - | (36,945 | ) | 22,739 | 0.10 | |||||||||||||||||||||||
| Acquisition-related intangibles amortization | - | (44,484 | ) | 44,484 | 44,484 | 13,191 | (775 | ) | 30,518 | 0.14 | |||||||||||||||||||||||
| Employee severance, litigation, and other | - | (40,497 | ) | 40,497 | 40,497 | 83,317 | 1 | - | (42,820 | ) | (0.20 | ) | |||||||||||||||||||||
| Loss on early retirement of debt | - | - | - | - | 148 | - | (148 | ) | - | ||||||||||||||||||||||||
| Tax reform 2 | - | - | - | - | 25,000 | - | (25,000 | ) | (0.11 | ) | |||||||||||||||||||||||
| Adjusted Non-GAAP | 1,164,687 | 732,262 | 432,425 | 390,198 | 76,626 | 1,564 | 315,136 | 1.45 | 3 | ||||||||||||||||||||||||
| Less non-wholly owned subsidiaries | 51,991 | 47,130 | 4,861 | (1,926 | ) | - | 1,564 | (363 | ) | - | |||||||||||||||||||||||
| Adjusted Non-GAAP excluding non-wholly owned subsidiaries | $ | 1,112,696 | $ | 685,132 | $ | 427,564 | $ | 392,124 | $ | 76,626 | $ | - | $ | 315,499 | $ | 1.45 | |||||||||||||||||
| Adjusted Non-GAAP % change vs. prior year quarter | 6.2% | 17.0% | (8.2)% | (10.2)% | (45.8)% | 7.4% | 9.0% | ||||||||||||||||||||||||||
| Adjusted Non-GAAP, excluding non-wholly owned subsidiaries, % change vs. prior year quarter | 1.4% | 9.4% | (9.2)% | (9.8)% | (45.8)% | 7.5% | 9.0% |
| Percentages of Revenue: | GAAP | Adjusted Non-GAAP | ||
| Gross profit | 2.39% | 2.69% | ||
| Operating expenses | 2.03% | 1.69% | ||
| Operating income | 0.36% | 1.00% |
________________________________________
1 During the fourth quarter of fiscal 2018, we determined that a significant portion of a fiscal 2017 legal settlement charge would be tax deductible.
2 Includes a measurement period adjustment of the one-time transition tax on historical foreign earnings and profits through December 31, 2017.
3 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)
| Three Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||||
| Gross Profit | Operating Expenses | Operating (Loss) Income | Interest Expense, Net | (Loss) Income Before Income Taxes | Income Tax Expense | Net (Loss) Income | Diluted Earnings Per Share | ||||||||||||||||||||||||||
| GAAP | $ | 1,172,020 | $ | 1,307,022 | $ | (135,002 | ) | $ | 35,311 | $ | (171,541 | ) | $ | 173,046 | $ | (344,587 | ) | $ | (1.58 | ) | |||||||||||||
| Warrants expense 1 | - | - | - | - | - | 132 | (132 | ) | - | ||||||||||||||||||||||||
| Gain from antitrust litigation settlements | - | - | - | - | - | (35 | ) | 35 | - | ||||||||||||||||||||||||
| LIFO credit | (74,863 | ) | - | (74,863 | ) | - | (74,863 | ) | (28,926 | ) | (45,937 | ) | (0.21 | ) | |||||||||||||||||||
| Acquisition-related intangibles amortization | - | (39,144 | ) | 39,144 | - | 39,237 | 16,984 | 22,253 | 0.10 | ||||||||||||||||||||||||
| Employee severance, litigation, and other 2 | - | (641,810 | ) | 641,810 | - | 641,810 | (19,942 | ) | 661,752 | 3.01 | |||||||||||||||||||||||
| Adjusted Non-GAAP | $ | 1,097,157 | $ | 626,068 | $ | 471,089 | $ | 35,311 | $ | 434,643 | $ | 141,259 | $ | 293,384 | $ | 1.33 | 3 |
| Percentages of Revenue: | GAAP | Adjusted Non-GAAP | ||
| Gross profit | 3.00% | 2.80% | ||
| Operating expenses | 3.34% | 1.60% | ||
| Operating (loss) income | (0.35)% | 1.20% |
________________________________________
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)
| Fiscal Year Ended September 30, 2018 | |||||||||||||||||||||||||||||||||
| Gross Profit | Operating Expenses | Operating Income | Income Before Income Taxes | Income Tax (Benefit) Expense | Net Loss Attributable to Noncontrolling Interest | Net Income Attributable to ABC | Diluted Earnings Per Share | ||||||||||||||||||||||||||
| GAAP | $ | 4,612,317 | $ | 3,168,632 | $ | 1,443,685 | $ | 1,177,423 | $ | (438,469 | ) | $ | 42,513 | $ | 1,658,405 | $ | 7.53 | ||||||||||||||||
| Gain from antitrust litigation settlements | (35,938 | ) | - | (35,938 | ) | (35,938 | ) | (10,000 | ) | - | (25,938 | ) | (0.12 | ) | |||||||||||||||||||
| LIFO expense | 67,324 | - | 67,324 | 67,324 | 18,733 | - | 48,591 | 0.22 | |||||||||||||||||||||||||
| PharMEDium remediation costs | 61,129 | (5,075 | ) | 66,204 | 66,204 | 18,421 | - | 47,783 | 0.22 | ||||||||||||||||||||||||
| New York State Opioid Stewardship Act | 22,000 | - | 22,000 | 22,000 | 6,122 | - | 15,878 | 0.07 | |||||||||||||||||||||||||
| Goodwill impairment charge | - | (59,684 | ) | 59,684 | 59,684 | - | (36,945 | ) | 22,739 | 0.10 | |||||||||||||||||||||||
| Acquisition-related intangibles amortization | - | (174,751 | ) | 174,751 | 174,876 | 48,660 | (1,846 | ) | 124,370 | 0.56 | |||||||||||||||||||||||
| Employee severance, litigation, and other | - | (183,520 | ) | 183,520 | 183,520 | 122,222 | 1 | - | 61,298 | 0.28 | |||||||||||||||||||||||
| Loss on consolidation of equity investments | - | - | - | 42,328 | - | - | 42,328 | 0.19 | |||||||||||||||||||||||||
| Impairment of non-customer note receivable | - | - | - | 30,000 | - | - | 30,000 | 0.14 | |||||||||||||||||||||||||
| Loss on early retirement of debt | - | - | - | 23,766 | 6,613 | - | 17,153 | 0.08 | |||||||||||||||||||||||||
| Tax reform 2 | - | - | - | - | 612,595 | - | (612,595 | ) | (2.78 | ) | |||||||||||||||||||||||
| Adjusted Non-GAAP | 4,726,832 | 2,745,602 | 1,981,230 | 1,811,187 | 384,897 | 3,722 | 1,430,012 | 6.49 | |||||||||||||||||||||||||
| Less non-wholly owned subsidiaries | 149,832 | 140,668 | 9,164 | (4,680 | ) | - | 3,722 | (958 | ) | - | |||||||||||||||||||||||
| Adjusted Non-GAAP excluding non-wholly owned subsidiaries | $ | 4,577,000 | $ | 2,604,934 | $ | 1,972,066 | $ | 1,815,867 | $ | 384,897 | $ | - | $ | 1,430,970 | $ | 6.49 | |||||||||||||||||
| Adjusted Non-GAAP % change vs. prior year | 7.8% | 15.9% | (1.8)% | (3.7)% | (33.2)% | 9.7% | 10.4% | ||||||||||||||||||||||||||
| Adjusted Non-GAAP, excluding non-wholly owned subsidiaries, % change vs. prior year | 4.3% | 9.9% | (2.2)% | (3.4)% | (33.2)% | 9.8% | 10.4% |
| Percentages of Revenue: | GAAP | Adjusted Non-GAAP | ||
| Gross profit | 2.75% | 2.81% | ||
| Operating expenses | 1.89% | 1.63% | ||
| Operating income | 0.86% | 1.18% |
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1 During the fourth quarter of fiscal 2018, we determined that a significant portion of a fiscal 2017 legal settlement charge would be tax deductible.
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)
| Fiscal Year Ended September 30, 2017 | ||||||||||||||||||||||||||||||||
| Gross Profit | Operating Expenses | Operating Income | Interest Expense, Net | Income Before Income Taxes | Income Tax Expense | Net Income | Diluted Earnings Per Share | |||||||||||||||||||||||||
| GAAP | $ | 4,546,002 | $ | 3,485,660 | $ | 1,060,342 | $ | 145,185 | $ | 917,887 | $ | 553,403 | $ | 364,484 | $ | 1.64 | ||||||||||||||||
| Warrants expense 1 | - | - | - | (5,358 | ) | 5,358 | 1,924 | 3,434 | 0.02 | |||||||||||||||||||||||
| Gain from antitrust litigation settlements | (1,395 | ) | - | (1,395 | ) | - | (1,395 | ) | (501 | ) | (894 | ) | - | |||||||||||||||||||
| LIFO credit | (157,782 | ) | - | (157,782 | ) | - | (157,782 | ) | (56,661 | ) | (101,121 | ) | (0.46 | ) | ||||||||||||||||||
| Acquisition-related intangibles amortization | - | (156,378 | ) | 156,378 | - | 156,752 | 56,291 | 100,461 | 0.45 | |||||||||||||||||||||||
| Employee severance, litigation, and other 2 | - | (959,327 | ) | 959,327 | - | 959,327 | 21,934 | 937,393 | 4.23 | |||||||||||||||||||||||
| Adjusted Non-GAAP | $ | 4,386,825 | $ | 2,369,955 | $ | 2,016,870 | $ | 139,827 | $ | 1,880,147 | $ | 576,390 | $ | 1,303,757 | $ | 5.88 |
| Percentages of Revenue: | GAAP | Adjusted Non-GAAP | ||
| Gross profit | 2.97% | 2.86% | ||
| Operating expenses | 2.28% | 1.55% | ||
| Operating income | 0.69% | 1.32% |
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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