The Company also announced that its Board of Directors has authorized a new special
Share repurchases under the special program are expected to take place over an extended period of time, subject to market conditions. As previously disclosed, the Company will exclude the impact of the share repurchases under the special programs from its presentation of adjusted diluted earnings per share from continuing operations until the warrants are exercised or expire. The exclusion of the special share repurchases prior to warrant exercise is consistent with the Company's exclusion of the accounting dilution resulting from the impact of the warrants in the calculation of the Company's adjusted diluted earnings per share.
"We have had excellent results in the first half of fiscal 2015, with tremendous financial performance and important progress made against our strategic objectives," said
The comments below compare adjusted results from continuing operations, which exclude:
- Warrant expense;
- Gains on antitrust litigation settlements;
- LIFO expense;
- Acquisition related intangibles amortization; and
- Employee severance, litigation, and other expenses.
In addition, we calculate our adjusted earnings per share for each period using a diluted weighted average share count, which excludes the accounting dilution resulting from the impact of the unexercised equity warrants, and the impact from the shares repurchased under our special share repurchase programs. We previously issued
Summary of Adjusted Quarterly Results
-
Revenue: In the second quarter of fiscal 2015, revenue was
$32.7 billion , up 14.8 percent compared to the same quarter in the previous fiscal year, reflecting a 13 percent increase inAmerisourceBergen Drug Corporation (ABDC) revenue, and a 25 percent increase inAmerisourceBergen Specialty Group (ABSG) revenue. -
Gross Profit: Gross profit in the fiscal 2015 second quarter was
$1.0 billion , a 25.3 percent increase over the same period in the previous year, driven by strong revenue growth in brand and generic pharmaceuticals in ABDC, strong revenue growth in ABSG, and the addition of approximately one month of results from MWI. Gross profit as a percentage of revenue increased 27 basis points to 3.19 percent. -
Operating Expenses: In the second quarter of fiscal 2015, operating expenses were
$488.9 million , up 17.8 percent over the same period in the last fiscal year. The increase in operating expenses in the quarter was driven by additional costs to support the increase in revenue growth and the addition of MWI. Operating expenses as a percentage of revenue in the fiscal 2015 second quarter were 1.50 percent compared with 1.46 percent for the same period in the previous fiscal year. -
Operating Income: In the fiscal 2015 second quarter, operating income of
$552.7 million was up 32.7 percent versus the prior year, as our gross profit growth exceeded our operating expense growth. Operating income as a percentage of revenue increased 23 basis points to 1.69 percent in the fiscal 2015 second quarter compared to the previous year's second quarter. -
Tax Rate: The effective tax rate for the second quarter of fiscal 2015 was 35.7 percent, down from 38.2 percent in the previous fiscal year's second quarter, as growth in our international businesses, including our global manufacturer services business in
Switzerland , has changed the mix of our domestic and foreign taxable income. We currently expect our annualized effective tax rate to be between 36 and 37 percent for the full year. -
Earnings Per Share: Diluted earnings per share from continuing operations were up 36.8 percent to
$1.45 in the second quarter of fiscal year 2015 compared to$1.06 in the previous fiscal year's second quarter, driven by the increase in operating income. - Shares Outstanding: Diluted weighted average shares outstanding for the second quarter of fiscal year 2015 were 230.4 million, a 1.7 percent decrease versus the prior year as share repurchases more than offset option exercises.
Segment Discussion
The Pharmaceutical Distribution segment includes both
Pharmaceutical Distribution Segment
In the second fiscal quarter of 2015, Pharmaceutical Distribution revenues were
Operating income of
Other
Revenues in Other were
Fiscal Year 2015 Expectations
Our updated expectations for financial performance in fiscal 2015, including the impact of the MWI transaction, are as follows:
-
Adjusted diluted earnings per share from continuing operations in the range of
$4.85 to $4.95 , a 22 percent to 25 percent increase over fiscal 2014, and an increase over prior guidance of$4.53 to $4.63 ; - Revenue growth in the range of 12 percent to 13 percent;
- Adjusted operating income growth in the 19 percent to 21 percent range;
- Adjusted operating margin increase of 8 to 10 basis points;
-
Free cash flow generation in the range of
$2.0 billion to $2.3 billion ; -
Capital expenditures in the
$250 million range; -
Regular share repurchases of approximately
$200 million ; and -
Special share repurchases of approximately
$600 million .
Conference Call
The Company will host a conference call to discuss the results at
Participating in the conference call will be:
Steven H. Collis, President & Chief Executive Officer |
Tim G. Guttman, Executive Vice President & Chief Financial Officer |
The dial-in number for the live call will be (612) 332-1210. No access code is required. The live call will also be webcast via the Company's website at www.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 thirty 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 US, dial (800) 475-6701. From outside the US, dial (320) 365-3844. The access code for the replay is 357616.
About
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," "will," "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: competition; 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; price inflation in branded and generic pharmaceuticals and price deflation in generics; declining economic conditions in
AMERISOURCEBERGEN CORPORATION | |||||||||||||||
FINANCIAL SUMMARY | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
Three | Three | ||||||||||||||
Months Ended | Months Ended | ||||||||||||||
March 31, | % of | March 31, | % of | % | |||||||||||
2015 | Revenue | 2014 | Revenue | Change | |||||||||||
Revenue | $32,669,267 | 100.00 | % | $28,455,903 | 100.00 | % | 14.8 | % | |||||||
Cost of goods sold | 31,757,291 | 27,726,310 | 14.5 | % | |||||||||||
Gross profit (1) | 911,976 | 2.79 | % | 729,593 | 2.56 | % | 25.0 | % | |||||||
Operating expenses: | |||||||||||||||
Distribution, selling and administrative | 442,443 | 1.35 | % | 376,341 | 1.32 | % | 17.6 | % | |||||||
Depreciation and amortization | 56,205 | 0.17 | % | 44,494 | 0.16 | % | 26.3 | % | |||||||
Warrants | 752,706 | 2.30 | % | 5,663 | 0.02 | % | |||||||||
Employee severance, litigation and other | 24,871 | 0.08 | % | 1,967 | 0.01 | % | |||||||||
Total operating expenses | 1,276,225 | 3.91 | % | 428,465 | 1.51 | % | 197.9 | % | |||||||
Operating (loss) income | (364,249 | ) | -1.11 | % | 301,128 | 1.06 | % | -221.0 | % | ||||||
Other loss (income) (2) | 11,405 | 0.03 | % | (3,783 | ) | -0.01 | % | ||||||||
Interest expense, net | 22,946 | 0.07 | % | 19,474 | 0.07 | % | 17.8 | % | |||||||
(Loss) income before income taxes | (398,600 | ) | -1.22 | % | 285,437 | 1.00 | % | -239.6 | % | ||||||
Income taxes | 114,790 | 0.35 | % | 105,360 | 0.37 | % | 9.0 | % | |||||||
Net (loss) income | ($513,390 | ) | -1.57 | % | $180,077 | 0.63 | % | ||||||||
Earnings per share: | |||||||||||||||
Basic | ($2.33 | ) | $0.78 | -398.7 | % | ||||||||||
Diluted | ($2.33 | ) | $0.76 | ||||||||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 220,243 | 229,409 | |||||||||||||
Diluted (3) | 220,243 | 236,268 | -6.8 | % |
(1) |
Includes a $151.1 million LIFO expense charge and a $21.5 million gain from antitrust litigation settlements in the three months ended March 31, 2015. Includes a $102.8 million LIFO expense charge and a $0.8 million gain from antitrust litigation settlements in the three months ended March 31, 2014. |
||
(2) |
Includes a $7.8 million loss on the sale of a small technology business. |
||
(3) |
Stock options, restricted stock, restricted stock units and the Warrants issued to Walgreens Boots Alliance were anti-dilutive for the three months ended March 31, 2015. The dilutive effect of these items is included in the three months ended March 31, 2014. |
AMERISOURCEBERGEN CORPORATION | |||||||||||||||
FINANCIAL SUMMARY | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
Six | Six | ||||||||||||||
Months Ended | Months Ended | ||||||||||||||
March 31, | % of | March 31, | % of | % | |||||||||||
2015 | Revenue | 2014 | Revenue | Change | |||||||||||
Revenue | $66,257,869 | 100.00 | % | $57,632,265 | 100.00 | % | 15.0 | % | |||||||
Cost of goods sold | 64,593,594 | 56,214,447 | 14.9 | % | |||||||||||
Gross profit (1) | 1,664,275 | 2.51 | % | 1,417,818 | 2.46 | % | 17.4 | % | |||||||
Operating expenses: | |||||||||||||||
Distribution, selling and administrative | 858,934 | 1.30 | % | 740,401 | 1.28 | % | 16.0 | % | |||||||
Depreciation and amortization | 105,502 | 0.16 | % | 88,444 | 0.15 | % | 19.3 | % | |||||||
Warrants | 1,124,111 | 1.70 | % | 121,960 | 0.21 | % | 821.7 | % | |||||||
Employee severance, litigation and other | 28,374 | 0.04 | % | 6,269 | 0.01 | % | 352.6 | % | |||||||
Total operating expenses | 2,116,921 | 3.19 | % | 957,074 | 1.66 | % | 121.2 | % | |||||||
Operating (loss) income | (452,646 | ) | -0.68 | % | 460,744 | 0.80 | % | -198.2 | % | ||||||
Other loss (income) (2) | 12,719 | 0.02 | % | (4,380 | ) | -0.01 | % | ||||||||
Interest expense, net | 40,288 | 0.06 | % | 38,306 | 0.07 | % | 5.2 | % | |||||||
(Loss) income before income taxes | (505,653 | ) | -0.76 | % | 426,818 | 0.74 | % | -218.5 | % | ||||||
Income taxes | 207,684 | 0.31 | % | 197,810 | 0.34 | % | 5.0 | % | |||||||
(Loss) income from continuing operations | (713,337 | ) | -1.08 | % | 229,008 | 0.40 | % | -411.5 | % | ||||||
Loss from discontinued operations, net of income taxes | - | (7,546 | ) | ||||||||||||
Net (loss) income | ($713,337 | ) | -1.08 | % | $221,462 | 0.38 | % | ||||||||
Basic earnings per share: | |||||||||||||||
Continuing operations | ($3.24 | ) | $1.00 | -424.0 | % | ||||||||||
Discontinued operations | - | (0.03 | ) | ||||||||||||
Rounding | - | (0.01 | ) | ||||||||||||
Total | ($3.24 | ) | $0.96 | ||||||||||||
Diluted earnings per share: | |||||||||||||||
Continuing operations | ($3.24 | ) | $0.97 | -434.0 | % | ||||||||||
Discontinued operations | - | (0.03 | ) | ||||||||||||
Total | ($3.24 | ) | $0.94 | ||||||||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 219,854 | 229,852 | |||||||||||||
Diluted (3) | 219,854 | 236,650 | -7.1 | % | |||||||||||
|
(1) |
Includes a $295.2 million LIFO expense charge and a $21.5 million gain from antitrust litigation settlements in the six months ended March 31, 2015. Includes a $160.4 million LIFO expense charge and a $21.9 million gain from antitrust litigation settlements in the six months ended March 31, 2014. |
|
(2) |
Includes a $7.8 million loss on the sale of a small technology business. |
|
(3) |
Stock options, restricted stock, restricted stock units and the Warrants issued to Walgreens Boots Alliance were anti-dilutive for the six months ended March 31, 2015. The dilutive effect of these items is included in the six months ended March 31, 2014. |
AMERISOURCEBERGEN CORPORATION | |||||||||||||||||||||||||
GAAP TO NON-GAAP RECONCILIATIONS | |||||||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
Three Months Ended March 31, 2015 | |||||||||||||||||||||||||
Gross Profit |
Operating |
Operating |
Interest |
(Loss) Income |
Income |
Net (Loss) |
Diluted |
||||||||||||||||||
GAAP | $911,976 | $1,276,225 | $(364,249 | ) | $22,946 | $(398,600 | ) | $114,790 | $(513,390 | ) | $(2.33 | ) | |||||||||||||
Warrant expense (1) | - | (752,706 | ) | 752,706 | (2,160 | ) | 754,866 | 7,157 | 747,709 | 3.35 | |||||||||||||||
Gain on antitrust litigation settlements | (21,483 | ) | - | (21,483 | ) | - | (21,483 | ) | (8,328 | ) | (13,155 | ) | (0.06 | ) | |||||||||||
LIFO expense | 151,144 | - | 151,144 | - | 151,144 | 58,930 | 92,214 | 0.40 | |||||||||||||||||
Acquisition related intangibles amortization | - | (9,736 | ) | 9,736 | - | 10,008 | 3,892 | 6,116 | 0.03 | ||||||||||||||||
Employee severance, litigation and other | - | (24,871 | ) | 24,871 | - | 24,871 | 9,568 | 15,303 | 0.07 | ||||||||||||||||
Adjusted Non-GAAP | $1,041,637 | $488,912 | $552,725 | $20,786 | $520,806 | $186,009 | $334,797 | $1.45 |
(2) |
||||||||||||||||
Adjusted Non-GAAP % changes vs. prior year quarter | 25.3 | % | 17.8 | % | 32.7 | % | 6.7 | % | 29.9 | % | 21.5 | % | 35.1 | % | 36.8 | % | |||||||||
Percentages of Revenue: | GAAP |
Adjusted |
|||||||||||||||||||||||
Gross profit | 2.79 | % | 3.19 | % | |||||||||||||||||||||
Operating expenses | 3.91 | % | 1.50 | % | |||||||||||||||||||||
Operating income | -1.11 | % | 1.69 | % |
(1) The amount of Warrant expense deductible for tax purposes is based on the initial valuation of the Warrants. Therefore, the income tax rate on Warrant expense will vary by quarter depending upon the quarterly changes in the fair value of the Warrants. In connection with the fiscal 2014 special $650 million share repurchase program, the Company issued $600 million of 1.15% senior notes due in May 2017. The interest expense incurred relating to this borrowing has been excluded from the non-GAAP presentation. |
(2) The sum of the components may not equal the total due to rounding. |
Note: Management considers GAAP financial measures as well as the presented non-GAAP financial measures in evaluating the Company's operating performance. Therefore, the Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. |
AMERISOURCEBERGEN CORPORATION | ||||||||||||||||||||
GAAP TO NON-GAAP RECONCILIATIONS | ||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||||||
Gross Profit |
Operating |
Operating |
Income Before |
Income |
Net Income |
Diluted |
||||||||||||||
GAAP | $729,593 | $428,465 | $301,128 | $285,437 | $105,360 | $180,077 | $0.76 | |||||||||||||
Warrant expense (1) | - | (5,663 | ) | 5,663 | 5,663 | 6,315 | (652 | ) | - | |||||||||||
Gain on antitrust litigation settlements | (849 | ) | - | (849 | ) | (849 | ) | (361 | ) | (488 | ) | - | ||||||||
LIFO expense | 102,828 | - | 102,828 | 102,828 | 38,862 | 63,966 | 0.27 | |||||||||||||
Acquisition related intangibles amortization | - | (5,825 | ) | 5,825 | 5,825 | 2,207 | 3,618 | 0.02 | ||||||||||||
Employee severance, litigation and other | - | (1,967 | ) | 1,967 | 1,967 | 750 | 1,217 | 0.01 | ||||||||||||
Adjusted Non-GAAP | $831,572 | $415,010 | $416,562 | $400,871 | $153,133 | $247,738 | $1.06 | |||||||||||||
Percentages of Revenue: | GAAP |
Adjusted |
||||||||||||||||||
Gross profit | 2.56 | % | 2.92 | % | ||||||||||||||||
Operating expenses | 1.51 | % | 1.46 | % | ||||||||||||||||
Operating income | 1.06 | % | 1.46 | % |
(1) The amount of Warrant expense deductible for tax purposes is based on the initial valuation of the Warrants. Therefore, the income tax rate on Warrant expense will vary by quarter depending upon the quarterly changes in the fair value of the Warrants. |
Note: Management considers GAAP financial measures as well as the presented non-GAAP financial measures in evaluating the Company's operating performance. Therefore, the Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. |
AMERISOURCEBERGEN CORPORATION | |||||||||||||||||||||||||
GAAP TO NON-GAAP RECONCILIATIONS | |||||||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
Six Months Ended March 31, 2015 | |||||||||||||||||||||||||
Gross Profit |
Operating |
Operating |
Interest |
(Loss) Income |
Income |
(Loss) |
Diluted |
||||||||||||||||||
GAAP | $1,664,275 | $2,116,921 | ($452,646 | ) | $40,288 | ($505,653 | ) | $207,684 | ($713,337 | ) | $(3.24 | ) | |||||||||||||
Warrant expense (1) | - | (1,124,111 | ) | 1,124,111 | (4,300 | ) | 1,128,411 | 14,297 | 1,114,114 | 4.99 | |||||||||||||||
Gain on antitrust litigation settlements | (21,483 | ) | - | (21,483 | ) | - | (21,483 | ) | (8,328 | ) | (13,155 | ) | (0.06 | ) | |||||||||||
LIFO expense | 295,168 | - | 295,168 | - | 295,168 | 114,426 | 180,742 | 0.79 | |||||||||||||||||
Acquisition related intangibles amortization | - | (14,768 | ) | 14,768 | - | 15,338 | 5,946 | 9,392 | 0.04 | ||||||||||||||||
Employee severance, litigation and other | - | (28,374 | ) | 28,374 | - | 28,374 | 10,918 | 17,456 | 0.08 | ||||||||||||||||
Adjusted Non-GAAP | $1,937,960 | $949,668 | $988,292 | $35,988 | $940,155 | $344,943 | $595,212 | $2.59 |
(2) |
||||||||||||||||
Adjusted Non-GAAP % changes vs. prior year period | 24.5 | % | 16.2 | % | 33.7 | % | -6.1 | % | 33.3 | % | 28.0 | % | 36.5 | % | 39.2 | % | |||||||||
Percentages of Revenue: | GAAP |
Adjusted |
|||||||||||||||||||||||
Gross profit | 2.51 | % | 2.92 | % | |||||||||||||||||||||
Operating expenses | 3.19 | % | 1.43 | % | |||||||||||||||||||||
Operating income | -0.68 | % | 1.49 | % |
(1) The amount of Warrant expense deductible for income tax purposes is based on the initial valuation of the Warrants. Therefore, the income tax rate on Warrant expense will vary by quarter depending upon the quarterly changes in the fair value of the Warrants. In connection with the fiscal 2014 special $650 million share repurchase program, the Company issued $600 million of 1.15% senior notes due in May 2017. The interest expense incurred relating to this borrowing has been excluded from the non-GAAP presentation. |
(2) The sum of the components may not equal the total due to rounding. |
Note: Management considers GAAP financial measures as well as the presented non-GAAP financial measures in evaluating the Company's operating performance. Therefore, the Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. |
AMERISOURCEBERGEN CORPORATION | |||||||||||||||||||||
GAAP TO NON-GAAP RECONCILIATIONS | |||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Six Months Ended March 31, 2014 | |||||||||||||||||||||
Gross Profit |
Operating |
Operating |
Income Before |
Income |
Income From |
Diluted |
|||||||||||||||
GAAP | $1,417,818 | $957,074 | $460,744 | $426,818 | $197,810 | $229,008 | $0.97 | ||||||||||||||
Warrant expense (1) | - | (121,960 | ) | 121,960 | 121,960 | 12,630 | 109,330 | 0.47 | |||||||||||||
Gain on antitrust litigation settlements | (21,872 | ) | - | (21,872 | ) | (21,872 | ) | (8,243 | ) | (13,629 | ) | (0.06 | ) | ||||||||
LIFO expense | 160,410 | - | 160,410 | 160,410 | 60,450 | 99,960 | 0.43 | ||||||||||||||
Acquisition related intangibles amortization | - | (11,783 | ) | 11,783 | 11,783 | 4,441 | 7,342 | 0.03 | |||||||||||||
Employee severance, litigation and other | - | (6,269 | ) | 6,269 | 6,269 | 2,363 | 3,906 | 0.02 | |||||||||||||
Adjusted Non-GAAP | $1,556,356 | $817,062 | $739,294 | $705,368 | $269,451 | $435,917 | $1.86 | ||||||||||||||
Percentages of Revenue: | GAAP |
Adjusted |
|||||||||||||||||||
Gross profit | 2.46 | % | 2.70 | % | |||||||||||||||||
Operating expenses | 1.66 | % | 1.42 | % | |||||||||||||||||
Operating income | 0.80 | % | 1.28 | % |
(1) The amount of Warrant expense deductible for income tax purposes is based on the initial valuation of the Warrants. Therefore, the income tax rate on Warrant expense will vary by quarter depending upon the quarterly changes in the fair value of the Warrants. |
Note: Management considers GAAP financial measures as well as the presented non-GAAP financial measures in evaluating the Company's operating performance. Therefore, the Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. |
AMERISOURCEBERGEN CORPORATION | ||||||||||||
RECONCILIATION OF DILUTED SHARES OUTSTANDING (GAAP TO NON-GAAP) | ||||||||||||
(In thousands) | ||||||||||||
(unaudited) | ||||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
Basic shares outstanding | 220,243 | 229,409 | 219,854 | 229,852 | ||||||||
Stock option, restricted stock, and restricted stock unit dilution | - | 4,863 | - | 4,985 | ||||||||
Warrant dilution | - | 1,996 | - | 1,813 | ||||||||
GAAP diluted shares outstanding | 220,243 | 236,268 | 219,854 | 236,650 | ||||||||
Warrant dilution (1) | - | (1,996 | ) | - | (1,813 | ) | ||||||
Shares repurchased under a special share repurchase program (1) | 5,112 | - | 4,974 | - | ||||||||
Stock option, restricted stock, and restricted stock unit dilution (2) | 5,036 |
- |
5,013 |
- |
||||||||
Non-GAAP diluted shares outstanding | 230,391 | 234,272 | 229,841 | 234,837 |
(1) For the non-GAAP presentation, diluted weighted average common shares outstanding have been adjusted to exclude the impact of the Warrants and the shares repurchased under a special $650 million share repurchase program, which was established to mitigate the potentially dilutive effect of the Warrants and supplements our previously executed hedging strategy. |
(2) For the non-GAAP presentation, diluted weighted average common shares outstanding have been adjusted to include the impact of the stock options, restricted stock, and restricted stock units that were anti-dilutive for the GAAP presentation. |
AMERISOURCEBERGEN CORPORATION | ||||||||||||
SUMMARY SEGMENT INFORMATION | ||||||||||||
(dollars in thousands) | ||||||||||||
(unaudited) | ||||||||||||
Three Months Ended March 31, | ||||||||||||
Revenue | 2015 | 2014 | % Change | |||||||||
Pharmaceutical Distribution | $31,762,523 | $27,932,495 | 13.7 | % | ||||||||
Other | 986,069 | 572,503 | 72.2 | % | ||||||||
Intersegment eliminations | (79,325 | ) | (49,095 | ) | 61.6 | % | ||||||
Revenue | $32,669,267 | $28,455,903 | 14.8 | % | ||||||||
Three Months Ended March 31, | ||||||||||||
Operating (loss) income | 2015 | 2014 | % Change | |||||||||
Pharmaceutical Distribution | $488,575 | $372,929 | 31.0 | % | ||||||||
Other | 64,150 | 43,633 | 47.0 | % | ||||||||
Total segment operating income | 552,725 | 416,562 | ||||||||||
Gains on antitrust litigation settlements | 21,483 | 849 | ||||||||||
LIFO expense | (151,144 | ) | (102,828 | ) | ||||||||
Acquisition related intangibles amortization | (9,736 | ) | (5,825 | ) | ||||||||
Warrant expense | (752,706 | ) | (5,663 | ) | ||||||||
Employee severance, litigation and other | (24,871 | ) | (1,967 | ) | ||||||||
Operating (loss) income | ($364,249 | ) | $301,128 | -221.0 | % | |||||||
Percentages of revenue: | ||||||||||||
Pharmaceutical Distribution | ||||||||||||
Gross profit | 2.67 | % | 2.49 | % | ||||||||
Operating expenses | 1.14 | % | 1.15 | % | ||||||||
Operating income | 1.54 | % | 1.34 | % | ||||||||
Other | ||||||||||||
Gross profit | 19.52 | % | 23.82 | % | ||||||||
Operating expenses | 13.02 | % | 16.20 | % | ||||||||
Operating income | 6.51 | % | 7.62 | % | ||||||||
AmerisourceBergen Corporation (GAAP) | ||||||||||||
Gross profit | 2.79 | % | 2.56 | % | ||||||||
Operating expenses | 3.91 | % | 1.51 | % | ||||||||
Operating income | -1.11 | % | 1.06 | % | ||||||||
AmerisourceBergen Corporation (Non-GAAP) | ||||||||||||
Gross profit | 3.19 | % | 2.92 | % | ||||||||
Operating expenses | 1.50 | % | 1.46 | % | ||||||||
Operating income | 1.69 | % | 1.46 | % | ||||||||
AMERISOURCEBERGEN CORPORATION | ||||||||||||
SUMMARY SEGMENT INFORMATION | ||||||||||||
(dollars in thousands) | ||||||||||||
(unaudited) | ||||||||||||
Six Months Ended March 31, | ||||||||||||
Revenue | 2015 | 2014 | % Change | |||||||||
Pharmaceutical Distribution | $64,745,247 | $56,555,086 | 14.5 | % | ||||||||
Other | 1,682,070 | 1,176,635 | 43.0 | % | ||||||||
Intersegment eliminations | (169,448 | ) | (99,456 | ) | 70.4 | % | ||||||
Revenue | $66,257,869 | $57,632,265 | 15.0 | % | ||||||||
Six Months Ended March 31, | ||||||||||||
Operating (loss) income | 2015 | 2014 | % Change | |||||||||
Pharmaceutical Distribution | $878,976 | $659,711 | 33.2 | % | ||||||||
Other | 109,316 | 79,583 | 37.4 | % | ||||||||
Total segment operating income | 988,292 | 739,294 | 33.7 | % | ||||||||
Gains on antitrust litigation settlements | 21,483 | 21,872 | ||||||||||
LIFO expense | (295,168 | ) | (160,410 | ) | ||||||||
Acquisition related intangibles amortization | (14,768 | ) | (11,783 | ) | ||||||||
Warrant expense | (1,124,111 | ) | (121,960 | ) | ||||||||
Employee severance, litigation and other | (28,374 | ) | (6,269 | ) | ||||||||
Operating (loss) income | ($452,646 | ) | $460,744 | -198.2 | % | |||||||
Percentages of revenue: | ||||||||||||
Pharmaceutical Distribution | ||||||||||||
Gross profit | 2.47 | % | 2.28 | % | ||||||||
Operating expenses | 1.12 | % | 1.11 | % | ||||||||
Operating income | 1.36 | % | 1.17 | % | ||||||||
Other | ||||||||||||
Gross profit | 20.02 | % | 22.69 | % | ||||||||
Operating expenses | 13.52 | % | 15.92 | % | ||||||||
Operating income | 6.50 | % | 6.76 | % | ||||||||
AmerisourceBergen Corporation (GAAP) | ||||||||||||
Gross profit | 2.51 | % | 2.46 | % | ||||||||
Operating expenses | 3.19 | % | 1.66 | % | ||||||||
Operating (loss) income | -0.68 | % | 0.80 | % | ||||||||
AmerisourceBergen Corporation (Non-GAAP) | ||||||||||||
Gross profit | 2.92 | % | 2.70 | % | ||||||||
Operating expenses | 1.43 | % | 1.42 | % | ||||||||
Operating income | 1.49 | % | 1.28 | % | ||||||||
AMERISOURCEBERGEN CORPORATION | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(in thousands) | ||||||
(unaudited) | ||||||
ASSETS | ||||||
March 31, | September 30, | |||||
2015 | 2014 | |||||
Current assets: | ||||||
Cash and cash equivalents | $2,336,979 | $1,808,513 | ||||
Accounts receivable, net | 7,560,122 | 6,312,883 | ||||
Merchandise inventories | 9,517,312 | 8,593,852 | ||||
Prepaid expenses and other | 142,410 | 84,957 | ||||
Total current assets | 19,556,823 | 16,800,205 | ||||
Property and equipment, net | 955,558 | 899,582 | ||||
Other long-term assets | 6,493,149 | 3,832,396 | ||||
Total assets | $27,005,530 | $21,532,183 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $18,395,154 | $15,592,834 | ||||
Short-term debt | 64,205 | - | ||||
Other current liabilities | 1,766,547 | 1,657,326 | ||||
Total current liabilities | 20,225,906 | 17,250,160 | ||||
Long-term debt | 3,942,517 | 1,995,632 | ||||
Other long-term liabilities | 920,852 | 329,492 | ||||
Stockholders' equity | 1,916,255 | 1,956,899 | ||||
Total liabilities and stockholders' equity | $27,005,530 | $21,532,183 | ||||
AMERISOURCEBERGEN CORPORATION | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
Six | Six | |||||||
Months Ended | Months Ended | |||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Operating Activities: | ||||||||
Net (loss) income | ($713,337 | ) | $221,462 | |||||
Loss from discontinued operations | - | 7,546 | ||||||
(Loss) income from continuing operations | (713,337 | ) | 229,008 | |||||
Adjustments to reconcile (loss) income from continuing operations to net cash provided by operating activities (1) |
1,263,253 | 231,572 | ||||||
Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures: | ||||||||
Accounts receivable | (810,902 | ) | (495,495 | ) | ||||
Merchandise inventories (2) | (611,235 | ) | (1,486,055 | ) | ||||
Accounts payable, accrued expenses, and income taxes | 2,566,923 | 1,612,833 | ||||||
Other | (56,018 | ) | 28,336 | |||||
Net cash provided by operating activities - continuing operations | 1,638,684 | 120,199 | ||||||
Net cash used in operating activities - discontinued operations | - | (7,546 | ) | |||||
Net cash provided by operating activities | 1,638,684 | 112,653 | ||||||
Investing Activities: | ||||||||
Capital expenditures | (105,201 | ) | (125,392 | ) | ||||
Cost of acquired companies, net of cash acquired | (2,603,918 | ) | (9,103 | ) | ||||
Other | 19,666 | 6,360 | ||||||
Net cash used in investing activities | (2,689,453 | ) | (128,135 | ) | ||||
Financing Activities: | ||||||||
Net borrowings | 2,010,781 | - | ||||||
Purchases of common stock (3) | (316,480 | ) | (251,961 | ) | ||||
Exercises of stock options | 141,895 | 59,675 | ||||||
Cash dividends on common stock | (128,119 | ) | (108,397 | ) | ||||
Purchases of capped call options | (100,000 | ) | (211,397 | ) | ||||
Other | (28,842 | ) | (6,714 | ) | ||||
Net cash provided by (used in) financing activities | 1,579,235 | (518,794 | ) | |||||
Increase (decrease) in cash and cash equivalents | 528,466 | (534,276 | ) | |||||
Cash and cash equivalents at beginning of period | 1,808,513 | 1,231,006 | ||||||
Cash and cash equivalents at end of period | $2,336,979 | $696,730 | ||||||
|
(1) Adjustments include non-cash warrant expense of $1,124.1 million and $122.0 million for the six months ended March 31, 2015 and 2014, respectively. |
(2) Merchandise inventories include LIFO expense of $295.2 million and $160.4 million for the six months ended March 31, 2015 and 2014, respectively. |
(3) Includes purchases made under the special share repurchase program totaling $150.2 million in the six months ended March 31, 2015, which includes $18.0 million of fiscal 2014 purchases that cash settled in October 2014. |
Source:
AmerisourceBergen Corporation
Barbara Brungess
Vice President, Corporate & Investor Relations
610-727-7199
[email protected]