Full Press Release Details
| AmerisourceBergen Corporation | |
| P.O. Box 959 | |
| Valley Forge, PA 19482 |
AMERISOURCEBERGEN REPORTS
FISCAL 2019 FOURTH QUARTER AND YEAR END RESULTS
Revenues of $45.6 Billion for the Fourth Quarter, a 5.4 Percent Increase Year-Over-Year
Fourth Quarter GAAP Diluted EPS of $0.63 and Adjusted Diluted EPS of $1.61
Revenues of $179.6 Billion for Fiscal Year 2019, a 6.9 Percent Increase Year-Over-Year
Fiscal Year 2019 GAAP Diluted EPS of $4.04 and Adjusted Diluted EPS of $7.09
VALLEY FORGE, PA, November 7, 2019 - AmerisourceBergen Corporation (NYSE:ABC) today reported that in its fiscal year 2019 fourth quarter ended September 30, 2019, revenue increased 5.4 percent to $45.6 billion. Revenue increased 6.9 percent to $179.6 billion for the fiscal year. On the basis of U.S. generally accepted accounting principles (GAAP), diluted earnings per share (EPS) was $0.63 for the September quarter of fiscal 2019, compared to $1.07 in the prior year quarter. Adjusted diluted EPS, which is a non-GAAP measure that excludes items described below, increased 11.0 percent to $1.61 in the fiscal fourth quarter. For fiscal year 2019, adjusted diluted EPS increased 9.2 percent to $7.09.
"In fiscal 2019, AmerisourceBergen performed extremely well, driven by execution across our Pharmaceutical Distribution and Global Commercialization Services & Animal Health teams. Working as a unified and connected organization, we created value for our shareholders, partners, customers, and the patients they serve," said Steven H. Collis, Chairman, President and Chief Executive Officer of AmerisourceBergen.
"As we enter fiscal 2020, we will continue to leverage our differentiated strategy and partnerships to grow our business," Mr. Collis continued. "AmerisourceBergen is well positioned to deliver long-term value for all of our stakeholders as we continue to focus on innovation, execution, advancing our talent and culture, and living our purpose of being united in our responsibility to create healthier futures."
Fourth Quarter Fiscal Year 2019 Summary Results
| GAAP | Adjusted (Non-GAAP) | |
| Revenue | $45.6B | $45.6B |
| Gross Profit | $1.2B | $1.2B |
| Operating Expenses | $1,005M | $789M |
| Operating Income | $180M | $456M |
| Interest Expense, Net | $36M | $36M |
| Effective Tax Rate | 8.5% | 19.6% |
| Net Income Attributable to ABC | $133M | $338M |
| Diluted Earnings Per Share | $0.63 | $1.61 |
| Diluted Shares Outstanding | 210M | 210M |
Below, AmerisourceBergen presents descriptive summaries of the Company's GAAP and adjusted (non-GAAP) quarterly and fiscal year 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.
Fourth Quarter GAAP Results
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 $43.9 billion, an increase of 5.1 percent compared to the same quarter in the prior fiscal year primarily due to continued strong specialty product sales and increased volume associated with the growth of some of its largest customers. Segment operating income of $369.3 million in the fourth quarter of fiscal 2019 was up 3.5 percent compared to the same period in the previous fiscal year, primarily due to the increase in gross profit, offset in part by an increase in operating expenses.
Revenue in Other was $1.8 billion in the fourth quarter of fiscal 2019, an increase of 12.6 percent compared to the same period in the prior fiscal year primarily due to growth at MWI and ABCS's growth in its Canadian operations. Operating income in Other increased 14.9 percent to $86.7 million in the fourth quarter of fiscal 2019. This increase was due to the results of World Courier, ABCS's Lash Consulting Services, and MWI.
Fiscal Year 2019 Summary Results
| GAAP | Adjusted (non-GAAP) | |
| Revenue | $179.6B | $179.6B |
| Gross Profit | $5.1B | $5.0B |
| Operating Expenses | $4.0B | $2.9B |
| Operating Income | $1.1B | $2.1B |
| Interest Expense, Net | $158M | $158M |
| Tax Rate | 11.7% | 20.6% |
| Net Income Attributable to ABC | $855M | $1,502M |
| Diluted Earnings Per Share | $4.04 | $7.09 |
| Diluted Shares Outstanding | 212M | 212M |
Summary Fiscal Year GAAP Results
In fiscal year 2019, GAAP diluted EPS was $4.04, compared to $7.53 in the prior year. Revenue of $179.6 billion was up 6.9 percent over the last fiscal year. Gross profit increased 11.4 percent to $5.1 billion primarily due to increases in gross profit within Pharmaceutical Distribution Services and Other. Total gross profit in fiscal year 2019 was also favorably impacted by increases in gains from antitrust litigation settlements, a LIFO credit in the current year period versus a LIFO expense in the prior year, and the reversal of a previously estimated assessment related to the New York State Opioid Stewardship Act. Operating expenses increased 27.1 percent over the prior fiscal year primarily due to a $570 million impairment of PharMEDium's long-lived assets, an increase in employee severance, litigation, and other costs, and an increase in distribution, selling and administrative expenses. Operating income decreased 23.0 percent and operating income margin decreased 24 basis points in the current fiscal
year as the increase in operating expenses exceeded the increase in gross profit. Diluted weighted average shares outstanding in fiscal 2019 were 211.8 million, down 3.9 percent from the prior fiscal year.
Summary Fiscal Year Adjusted (non-GAAP) Results
In fiscal year 2019, adjusted diluted EPS was $7.09, an increase of 9.2 percent over the prior fiscal year primarily due to an increase in operating income, a decrease in net interest expense, and a decrease in adjusted diluted weighted average shares outstanding. Adjusted diluted weighted average shares outstanding in fiscal 2019 were 211.8 million, down 3.9 percent from the prior fiscal year. Revenue increased 6.9 percent from last fiscal year to $179.6 billion. Adjusted gross profit increased by $269.7 million, or 5.7 percent, from prior fiscal year to $5.0 billion primarily due to the increases in gross profit within Pharmaceutical Distribution Services and Other. Adjusted operating income increased 3.5 percent as the increase in adjusted gross profit exceeded the increase in adjusted operating expenses. Adjusted operating income margin decreased 4 basis points from 1.18 percent to 1.14 percent primarily due to a lower contribution from PharMEDium.
Recent Company Highlights & Milestones
Dividend Declaration
The Company's Board of Directors declared a quarterly cash dividend of $0.40 per common share, payable December 2, 2019, to stockholders of record at the close of business on November 18, 2019.
Fiscal Year 2020 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 2020 Expectations on an Adjusted (non-GAAP) Basis
AmerisourceBergen has introduced its fiscal year 2020 financial guidance, which reflects growth in both Pharmaceutical Distribution Services and businesses focused on Global Commercialization Services & Animal Health. Notably, our revenue growth reflects the onboarding of new volume through our second largest customer. The Company expects:
Additional expectations include:
Conference Call & Slide Presentation
The Company will host a conference call to discuss the results at 8:30 a.m. ET on November 7, 2019. 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 (612) 288-0340. 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 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 472893.
Upcoming Investor Events
AmerisourceBergen management will be attending the following investor conference in the coming months:
J.P. Morgan Healthcare Conference, January 13-16, San Francisco.
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 22,000 associates-we are united in our responsibility to create healthier futures. AmerisourceBergen is ranked #10 on the Fortune 500, with more than $175 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 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 and pharmaceutical compounding; 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 opioid medications, 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 developments or 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 or enforcement action in connection with the production, labeling or packaging of products compounded by our compounded sterile preparations (CSP) business or the related consent decree; suspension of production of CSPs, including continued suspension at PharMEDium's Memphis facility; 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; the loss, bankruptcy or insolvency of a major supplier; substantial defaults in payment, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; 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 any additional impairments with respect to foreign operations or PharMEDium), 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 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 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, 2018 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 September 30, 2019 | % of Revenue | Three Months Ended September 30, 2018 | % of Revenue | % Change | ||||||||||
| Revenue | $ | 45,637,802 | $ | 43,297,136 | 5.4% | |||||||||
| Cost of goods sold | 44,453,065 | 42,264,495 | 5.2% | |||||||||||
| Gross profit 1 | 1,184,737 | 2.60% | 1,032,641 | 2.39% | 14.7% | |||||||||
| Operating expenses: | ||||||||||||||
| Distribution, selling, and administrative | 721,944 | 1.58% | 657,805 | 1.52% | 9.8% | |||||||||
| Depreciation and amortization | 108,545 | 0.24% | 120,558 | 0.28% | (10.0)% | |||||||||
| Goodwill impairment charge 2 | - | 59,684 | ||||||||||||
| Employee severance, litigation, and other 3 | 174,407 | 40,497 | ||||||||||||
| Total operating expenses | 1,004,896 | 2.20% | 878,544 | 2.03% | 14.4% | |||||||||
| Operating income | 179,841 | 0.39% | 154,097 | 0.36% | 16.7% | |||||||||
| Other income | (1,213 | ) | (820 | ) | ||||||||||
| Interest expense, net | 36,403 | 43,047 | (15.4)% | |||||||||||
| Income before income taxes | 144,651 | 0.32% | 111,870 | 0.26% | 29.3% | |||||||||
| Income tax expense (benefit) | 12,344 | (82,134 | ) | |||||||||||
| Net income | 132,307 | 0.29% | 194,004 | 0.45% | (31.8)% | |||||||||
| Net income attributable to noncontrolling interest | 312 | 39,284 | ||||||||||||
| Net income attributable to AmerisourceBergen Corporation | $ | 132,619 | 0.29% | $ | 233,288 | 0.54% | (43.2)% | |||||||
| Earnings per share: | ||||||||||||||
| Basic | $ | 0.64 | $ | 1.08 | (40.7)% | |||||||||
| Diluted | $ | 0.63 | $ | 1.07 | (41.1)% | |||||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | 207,979 | 215,430 | (3.5)% | |||||||||||
| Diluted | 209,680 | 217,492 | (3.6)% |
________________________________________
AMERISOURCEBERGEN CORPORATION
(In thousands, except per share data)
| Fiscal Year Ended September 30, 2019 | % of Revenue | Fiscal Year Ended September 30, 2018 | % of Revenue | % Change | ||||||||||
| Revenue | $ | 179,589,121 | $ | 167,939,635 | 6.9% | |||||||||
| Cost of goods sold | 174,450,809 | 163,327,318 | 6.8% | |||||||||||
| Gross profit 1 | 5,138,312 | 2.86% | 4,612,317 | 2.75% | 11.4% | |||||||||
| Operating expenses: | ||||||||||||||
| Distribution, selling, and administrative | 2,663,508 | 1.48% | 2,460,301 | 1.46% | 8.3% | |||||||||
| Depreciation and amortization | 462,407 | 0.26% | 465,127 | 0.28% | (0.6)% | |||||||||
| Goodwill impairment charge 2 | - | 59,684 | ||||||||||||
| Employee severance, litigation, and other 3 | 330,474 | 183,520 | ||||||||||||
| Impairment of long-lived assets 4 | 570,000 | - | ||||||||||||
| Total operating expenses | 4,026,389 | 2.24% | 3,168,632 | 1.89% | 27.1% | |||||||||
| Operating income | 1,111,923 | 0.62% | 1,443,685 | 0.86% | (23.0)% | |||||||||
| Other (income) loss 5 | (12,952 | ) | 25,469 | |||||||||||
| Interest expense, net | 157,769 | 174,699 | (9.7)% | |||||||||||
| Loss on consolidation of equity investments | - | 42,328 | ||||||||||||
| Loss on early retirement of debt | - | 23,766 | ||||||||||||
| Income before income taxes | 967,106 | 0.54% | 1,177,423 | 0.70% | (17.9)% | |||||||||
| Income tax expense (benefit) | 112,971 | (438,469 | ) | |||||||||||
| Net income | 854,135 | 0.48% | 1,615,892 | 0.96% | (47.1)% | |||||||||
| Net loss attributable to noncontrolling interest | 1,230 | 42,513 | ||||||||||||
| Net income attributable to AmerisourceBergen Corporation | $ | 855,365 | 0.48% | $ | 1,658,405 | 0.99% | (48.4)% | |||||||
| Earnings per share: | ||||||||||||||
| Basic | $ | 4.07 | $ | 7.61 | (46.5)% | |||||||||
| Diluted | $ | 4.04 | $ | 7.53 | (46.3)% | |||||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | 210,165 | 217,872 | (3.5)% | |||||||||||
| Diluted | 211,840 | 220,336 | (3.9)% |
________________________________________
AMERISOURCEBERGEN CORPORATION
GAAP TO NON-GAAP RECONCILIATIONS
(in thousands, except per share data)
| Three Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||
| Gross Profit | Operating Expenses | Operating Income | Income Before Income Taxes | Income Tax Expense | Net Loss (Income) Attributable to Noncontrolling Interest | Net Income Attributable to ABC | Diluted Earnings Per Share | |||||||||||||||||||||||||
| GAAP | $ | 1,184,737 | $ | 1,004,896 | $ | 179,841 | $ | 144,651 | $ | 12,344 | $ | 312 | $ | 132,619 | $ | 0.63 | ||||||||||||||||
| Gain from antitrust litigation settlements | (3,137 | ) | - | (3,137 | ) | (3,137 | ) | (764 | ) | - | (2,373 | ) | (0.01 | ) | ||||||||||||||||||
| LIFO expense | 57,203 | - | 57,203 | 57,203 | 14,956 | - | 42,247 | 0.20 | ||||||||||||||||||||||||
| PharMEDium remediation costs | 6,660 | (7,027 | ) | 13,687 | 13,687 | 3,550 | - | 10,137 | 0.05 | |||||||||||||||||||||||
| Acquisition-related intangibles amortization | - | (34,078 | ) | 34,078 | 34,078 | 8,844 | (438 | ) | 24,796 | 0.12 | ||||||||||||||||||||||
| Employee severance, litigation, and other | - | (174,407 | ) | 174,407 | 174,407 | 43,855 | - | 130,552 | 0.62 | |||||||||||||||||||||||
| Other | - | - | - | - | (204 | ) | - | 204 | - | |||||||||||||||||||||||
| Adjusted Non-GAAP | $ | 1,245,463 | $ | 789,384 | $ | 456,079 | $ | 420,889 | $ | 82,581 | $ | (126 | ) | $ | 338,182 | $ | 1.61 | |||||||||||||||
| Adjusted Non-GAAP % change vs. prior year quarter | 6.9 | % | 7.8 | % | 5.5 | % | 7.9 | % | 7.8 | % | 7.3 | % | 11.0 | % |
| Percentages of Revenue: | GAAP | Adjusted Non-GAAP | ||
| Gross profit | 2.60% | 2.73% | ||
| Operating expenses | 2.20% | 1.73% | ||
| Operating income | 0.39% | 1.00% |
________________________________________
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, 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 | $ | 1,032,641 | $ | 878,544 | $ | 154,097 | $ | 111,870 | $ | (82,134 | ) | $ | 39,284 | $ | 233,288 | $ | 1.07 | ||||||||||||||||
| 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 | ) | |||||||||||||||||||||
| Tax Reform 2 | - | - | - | - | 25,000 | - | (25,000 | ) | (0.11 | ) | |||||||||||||||||||||||
| Other | - | - | - | - | (77 | ) | - | 77 | - | ||||||||||||||||||||||||
| Adjusted Non-GAAP | $ | 1,164,687 | $ | 732,262 | $ | 432,425 | $ | 390,198 | $ | 76,626 | $ | 1,564 | $ | 315,136 | $ | 1.45 | 3 |
| 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% |
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1 During the fourth quarter of fiscal 2018, the Company determined a significant portion of a fiscal 2017 legal settlement charge is 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)
| Fiscal Year Ended September 30, 2019 | ||||||||||||||||||||||||||||||||
| Gross Profit | Operating Expenses | Operating Income | Income Before Income Taxes | Income Tax Expense | Net Loss (Income) Attributable to Noncontrolling Interest | Net Income Attributable to ABC | Diluted Earnings Per Share | |||||||||||||||||||||||||
| GAAP | $ | 5,138,312 | $ | 4,026,389 | $ | 1,111,923 | $ | 967,106 | $ | 112,971 | $ | 1,230 | $ | 855,365 | $ | 4.04 | ||||||||||||||||
| Gain from antitrust litigation settlements | (145,872 | ) | - | (145,872 | ) | (145,872 | ) | (38,063 | ) | - | (107,809 | ) | (0.51 | ) | ||||||||||||||||||
| LIFO credit | (22,544 | ) | - | (22,544 | ) | (22,544 | ) | (5,883 | ) | - | (16,661 | ) | (0.08 | ) | ||||||||||||||||||
| PharMEDium remediation costs | 48,603 | (20,820 | ) | 69,423 | 69,423 | 18,115 | - | 51,308 | 0.24 | |||||||||||||||||||||||
| New York State Opioid Stewardship Act | (22,000 | ) | - | (22,000 | ) | (22,000 | ) | (5,741 | ) | - | (16,259 | ) | (0.08 | ) | ||||||||||||||||||
| Acquisition-related intangibles amortization | - | (159,848 | ) | 159,848 | 159,848 | 41,710 | (1,821 | ) | 116,317 | 0.55 | ||||||||||||||||||||||
| Employee severance, litigation, and other | - | (330,474 | ) | 330,474 | 330,474 | 84,638 | - | 245,836 | 1.16 | |||||||||||||||||||||||
| Impairment of long-lived assets | - | (570,000 | ) | 570,000 | 570,000 | 148,734 | - | 421,266 | 1.99 | |||||||||||||||||||||||
| Gain on sale of an equity investment | - | - | - | (13,692 | ) | (3,573 | ) | - | (10,119 | ) | (0.05 | ) | ||||||||||||||||||||
| Tax reform 1 | - | - | - | - | 36,997 | - | (36,997 | ) | (0.17 | ) | ||||||||||||||||||||||
| Adjusted Non-GAAP | $ | 4,996,499 | $ | 2,945,247 | $ | 2,051,252 | $ | 1,892,743 | $ | 389,905 | $ | (591 | ) | $ | 1,502,247 | $ | 7.09 | |||||||||||||||
| Adjusted Non-GAAP % change vs. prior year | 5.7 | % | 7.3 | % | 3.5 | % | 4.5 | % | 1.3 | % | 5.1 | % | 9.2 | % |
| Percentages of Revenue: | GAAP | Adjusted Non-GAAP | ||
| Gross profit | 2.86% | 2.78% | ||
| Operating expenses | 2.24% | 1.64% | ||
| Operating income | 0.62% | 1.14% |
________________________________________
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 on 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 |
| 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% |
________________________________________
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)
| Three Months Ended September 30, | ||||||||||
| Revenue | 2019 | 2018 | % Change | |||||||
| Pharmaceutical Distribution Services | $ | 43,865,440 | $ | 41,726,426 | 5.1% | |||||
| Other | 1,797,436 | 1,596,178 | 12.6% | |||||||
| Intersegment eliminations | (25,074 | ) | (25,468 | ) | ||||||
| Revenue | $ | 45,637,802 | $ | 43,297,136 | 5.4% |
| Three Months Ended September 30, | ||||||||||
| Operating income | 2019 | 2018 | % Change | |||||||
| Pharmaceutical Distribution Services | $ | 369,303 | $ | 356,808 | 3.5% | |||||
| Other | 86,737 | 75,465 | 14.9% | |||||||
| Intersegment eliminations | 39 | 152 | ||||||||
| Total segment operating income | 456,079 | 432,425 | 5.5% | |||||||
| Gain from antitrust litigation settlements | 3,137 | - | ||||||||
| LIFO expense | (57,203 | ) | (83,466 | ) | ||||||
| PharMEDium remediation costs | (13,687 | ) | (28,197 | ) | ||||||
| New York State Opioid Stewardship Act | - | (22,000 | ) | |||||||
| Goodwill impairment charge | - | (59,684 | ) | |||||||
| Acquisition-related intangibles amortization | (34,078 | ) | (44,484 | ) | ||||||
| Employee severance, litigation, and other | (174,407 | ) | (40,497 | ) | ||||||
| Operating income | $ | 179,841 | $ | 154,097 | ||||||
| Percentages of revenue: | ||||||||||
| Pharmaceutical Distribution Services | ||||||||||
| Gross profit | 2.07% | 2.06% | ||||||||
| Operating expenses | 1.23% | 1.21% | ||||||||
| Operating income | 0.84% | 0.86% | ||||||||
| Other | ||||||||||
| Gross profit | 18.76% | 19.02% | ||||||||
| Operating expenses | 13.93% | 14.29% | ||||||||
| Operating income | 4.83% | 4.73% | ||||||||
| AmerisourceBergen Corporation (GAAP) | ||||||||||
| Gross profit | 2.60% | 2.39% | ||||||||
| Operating expenses | 2.20% | 2.03% | ||||||||
| Operating income | 0.39% | 0.36% | ||||||||
| AmerisourceBergen Corporation (Non-GAAP) | ||||||||||
| Adjusted gross profit | 2.73% | 2.69% | ||||||||
| Adjusted operating expenses | 1.73% | 1.69% | ||||||||
| Adjusted operating income | 1.00% | 1.00% |
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)
| Fiscal Year Ended September 30, | ||||||||||
| Revenue | 2019 | 2018 | % Change | |||||||
| Pharmaceutical Distribution Services | $ | 172,813,537 | $ | 161,699,343 | 6.9% | |||||
| Other | 6,868,341 | 6,332,730 | 8.5% | |||||||
| Intersegment eliminations | (92,757 | ) | (92,438 | ) | ||||||
| Revenue | $ | 179,589,121 | $ | 167,939,635 | 6.9% |
| Fiscal Year Ended September 30, | ||||||||||
| Operating income | 2019 | 2018 | % Change | |||||||
| Pharmaceutical Distribution Services | $ | 1,671,251 | $ | 1,626,748 | 2.7% | |||||
| Other | 380,660 | 355,091 | 7.2% | |||||||
| Intersegment eliminations | (659 | ) | (609 | ) | ||||||
| Total segment operating income | 2,051,252 | 1,981,230 | 3.5% | |||||||
| Gain from antitrust litigation settlements | 145,872 | 35,938 | ||||||||
| LIFO credit (expense) | 22,544 | (67,324 | ) | |||||||
| PharMEDium remediation costs | (69,423 | ) | (66,204 | ) | ||||||
| New York State Opioid Stewardship Act | 22,000 | (22,000 | ) | |||||||
| Goodwill impairment charge | - | (59,684 | ) | |||||||
| Acquisition-related intangibles amortization | (159,848 | ) | (174,751 | ) | ||||||
| Employee severance, litigation, and other | (330,474 | ) | (183,520 | ) | ||||||
| Impairment of long-lived assets | (570,000 | ) | - | |||||||
| Operating income | $ | 1,111,923 | $ | 1,443,685 | ||||||
| Percentages of revenue: | ||||||||||
| Pharmaceutical Distribution Services | ||||||||||
| Gross profit | 2.13% | 2.14% | ||||||||
| Operating expenses | 1.16% | 1.14% | ||||||||
| Operating income | 0.97% | 1.01% | ||||||||
| Other | ||||||||||
| Gross profit | 19.13% | 19.90% | ||||||||
| Operating expenses | 13.59% | 14.30% | ||||||||
| Operating income | 5.54% | 5.61% | ||||||||
| AmerisourceBergen Corporation (GAAP) | ||||||||||
| Gross profit | 2.86% | 2.75% | ||||||||
| Operating expenses | 2.24% | 1.89% | ||||||||
| Operating income | 0.62% | 0.86% | ||||||||
| AmerisourceBergen Corporation (Non-GAAP) | ||||||||||
| Adjusted gross profit | 2.78% | 2.81% | ||||||||
| Adjusted operating expenses | 1.64% | 1.63% | ||||||||
| Adjusted operating income | 1.14% | 1.18% |
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