[February 04, 2016] |
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AmerisourceBergen Reports First Quarter Fiscal Year 2016 Results
AmerisourceBergen Corporation (NYSE:ABC) today reported that in its
fiscal year 2016 first quarter ended December 31, 2015, adjusted diluted
earnings per share increased 11.4 percent to $1.27. Revenue increased
9.3 percent to $36.7 billion in the quarter. On the basis of U.S.
generally accepted accounting principles (GAAP), diluted earnings per
share were $1.46 for the December quarter of fiscal 2016. In the tables
that follow, we present our GAAP results as well as GAAP to non-GAAP
reconciliations.
"I am pleased with the solid performance we delivered in the December
quarter," said Steven H. Collis, President and Chief Executive Officer
of AmerisourceBergen. "Our recent acquisitions, MWI Veterinary Supply
(MWI) and PharMEDium, as well as strong contributions from our specialty
business and our international businesses helped overcome a challenging
year over year comparison and a sharper than expected decline in generic
inflation."
The comments below compare adjusted results, which exclude:
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Warrant expense;
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Gains on antitrust litigation settlements;
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LIFO expense;
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Acquisition-related intangibles amortization;
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Employee severance, litigation and other expenses; and
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A pension settlement charge.
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 $600 million of 1.15%
senior notes due in May 2017 to fund our initial special share
repurchase program. The interest expense incurred relating to this
borrowing is also excluded from the non-GAAP presentation.
Summary of Adjusted Quarterly Results
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Revenue: In the first quarter of fiscal
2016, revenue was $36.7 billion, up 9.3 percent compared to the same
quarter in the previous fiscal year, reflecting a 7 percent increase
in Pharmaceutical Distribution revenue, and a 127 percent increase in
revenue within Other.
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Gross Profit: Gross profit in the fiscal
2016 first quarter was $1.1 billion, a 17.6 percent increase over the
same period in the previous year, driven primarily by the addition of
MWI, which was acquired in February 2015. Gross profit as a percentage
of revenue increased 20 basis points to 2.87 percent from the prior
year quarter.
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Operating Expenses: In the first quarter
of fiscal 2016, operating expenses were $579 million, up 25.6 percent
over the same period in the last fiscal year. The increase in
operating expenses in the quarter was primarily driven by the addition
of MWI and additional costs to support the revenue growth of our
businesses. Operating expenses as a percentage of revenue in the
fiscal 2016 first quarter were 1.58 percent compared with 1.37 percent
for the same period in the previous fiscal year, driven by the higher
expense profile of MWI.
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Operating Income: In the fiscal 2016
first quarter, operating income of $475 million was up 9.1 percent
versus the prior year, driven by the increase in gross profit, which
was offset in part by the increase in operating expenses. Operating
income as a percentage of revenue decreased 1 basis point to 1.29
percent in the fiscal 2016 first quarter compared to the previous
year's first quarter.
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Interest Expense: In the fiscal
2016 first quarter, interest expense of $29 million was up 88.9
percent versus the prior year quarter due to the increase in
variable-rate borrowings to partially fund the acquisitions of MWI and
PharMEDium.
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Tax Rate: The effective tax rate for the
first quarter of fiscal 2016 was 34.6 percent, down from 37.9 percent
in the previous fiscal year's first quarter, reflecting the favorable
impact of growth in our international businesses.
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Earnings Per Share: Diluted earnings per
share were up 11.4 percent to $1.27 in the first quarter of fiscal
year 2016 compared to $1.14 in the previous fiscal year's first
quarter, driven primarily by the increase in operating income and
offset in part by the increase in interest expense.
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Shares Outstanding: Diluted weighted
average shares outstanding for the first quarter of fiscal year 2016
were 229.9 million, a slight increase versus the prior year.
Segment Discussion
The Pharmaceutical Distribution segment includes both AmerisourceBergen
Drug Corporation and AmerisourceBergen Specialty Group. Other includes
AmerisourceBergen Consulting Services, World Courier, and MWI.
Pharmaceutical Distribution Segment
In the first fiscal quarter of 2016, Pharmaceutical Distribution
revenues were $35.2 billion, an increase of 7 percent compared to the
same quarter in the prior year. ABDC revenues increased 5 percent, due
primarily to solid organic sales growth from our chain retail,
independent pharmacy, and health systems customers. ABSG revenues
increased 15 percent, which was driven by strong performance in our
oncology business (including an increase in sales to community
oncologists), and by sales growth in our blood products, vaccine and
physician office distribution businesses. Intrasegment revenues between
ABDC and ABSG have been eliminated in the presentation of total
Pharmaceutical Distribution revenue. Total intrasegment revenues were
$1.7 billion and $1.6 billion in the quarters ended December 31, 2015
and 2014, respectively.
Operating income of $380 million in the December quarter of fiscal 2016
was down 3 percent compared to the same period in the previous year due
to a lower contribution from generic inflation and the impact of
previously announced customer renewals.
Other
Revenues in Other were $1.6 billion in the first quarter of fiscal 2016,
an increase of 127 percent over the same period in the prior year due to
the addition of MWI, which was acquired in February of 2015. Operating
income increased 112 percent to $96 million in the first quarter of
fiscal 2016, driven by the additional income from MWI.
Fiscal Year 2016 Expectations
"This morning, we announced that we signed a distribution agreement with
a new customer, Publix, the impact of which was included in our
previously disclosed fiscal 2016 expectations. In January 2016, we
signed an early renewal and long-term contract extension with our
largest independent pharmacy group purchasing organization customer,
Compliant Pharmacy Alliance Cooperative," said Mr. Collis. "While this
strategic renewal was not contemplated in our prior expectations, it
strengthens our position in a key customer segment for many years to
come."
"Looking ahead, the decline in generic inflation, the early contract
renewal, and a reduction in our expectations regarding the contribution
from generic launches over the course of the year will make it difficult
for us to achieve the high end of our original adjusted earnings per
share range for fiscal 2016. Therefore, we now expect our adjusted
diluted earnings per share to be in the range of $5.73 to $5.83 for
fiscal 2016."
Other assumptions for financial performance in fiscal 2016 now include:
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Revenue growth in the range of 8 percent to 10 percent;
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Adjusted operating margin increase of 3 to 5 basis points;
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Effective tax rate of about 33.5 percent;
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Free cash flow generation in the range of $2.3 billion to $2.7 billion;
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Capital expenditures in the $400 million range;
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Modest share repurchases under the regular and special programs, as
well as special share repurchases to satisfy previously disclosed
hedging programs, all subject to market conditions.
Conference Call
The Company will host a conference call to discuss the results at 11:00
a.m. Eastern Time on February 4, 2016.
Participating in the conference call will be:
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Steven H. Collis, President & Chief Executive Officer
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Tim G. Guttman, Executive Vice President & Chief Financial Officer
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The dial-in number for the live call will be (612) 234-9960. 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
U.S., dial (800) 475-6701. From outside the U.S., dial (320) 365-3844.
The access code for the replay is 383092.
About AmerisourceBergen
AmerisourceBergen is one of the largest global pharmaceutical sourcing
and distribution services companies, helping both healthcare providers
and pharmaceutical and biotech manufacturers improve patient access to
products and enhance patient care. With services ranging from drug
distribution and niche premium logistics to reimbursement and
pharmaceutical consulting services, AmerisourceBergen delivers
innovative programs and solutions across the pharmaceutical supply
channel in human and animal health. With over $135 billion in annual
revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and
employs approximately 18,000 people. AmerisourceBergen is ranked #16 on
the Fortune 500 list. For more information, go to www.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," "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 the United States and abroad; 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; 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 in any of the economic models used by any of our
suppliers to set pricing and/or other terms for the purchase of
pharmaceuticals; interest rate and foreign currency exchange rate
fluctuations; the disruption of AmerisourceBergen's cash flow and
ability to return value to its stockholders in accordance with its past
practices; risks associated with the strategic, long-term relationship
between Walgreen Boots Alliance, Inc. and AmerisourceBergen, including
with respect to the pharmaceutical distribution agreement and/or the
global sourcing arrangement; risks associated with the potential impact
on AmerisourceBergen's earnings per share resulting from the issuance of
the warrants to subsidiaries of Walgreen Boots Alliance, Inc. (the
"Warrants"); AmerisourceBergen's inability to fully implement its
hedging strategy to mitigate the potentially dilutive effect of the
issuance of its common stock in accordance with the Warrants under its
special share repurchase program due to its financial performance, the
current and future share price of its common stock, its expected cash
flows, competing priorities for capital, and overall market conditions;
changes in the United States healthcare and regulatory environment;
increasing governmental regulations regarding the pharmaceutical supply
channel and pharmaceutical compounding; federal and state government
enforcement initiatives to detect and prevent suspicious orders of
controlled substances and the diversion of controlled substances;
federal and state prosecution of alleged violations of related laws and
regulations, and any related litigation, including shareholder
derivative lawsuits or other disputes relating to our distribution of
controlled substances; increased federal scrutiny and qui tam litigation
for alleged violations of fraud and abuse laws and regulations and/or
any other laws and regulations governing the marketing, sale, purchase
and/or dispensing of pharmaceutical products or services and any related
litigation; material adverse resolution of pending legal proceedings;
declining reimbursement rates for pharmaceuticals; the acquisition of
businesses that do not perform as expected, or that are difficult to
integrate or control, including the integration of MWI and PharMEDium,
or the inability to capture all of the anticipated synergies related
thereto; 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; 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; changes in tax laws or
legislative initiatives that could adversely affect AmerisourceBergen's
tax positions and/or AmerisourceBergen's tax liabilities or adverse
resolution of challenges to AmerisourceBergen's tax positions; natural
disasters or other unexpected events that affect AmerisourceBergen's
operations; the impairment of goodwill or other intangible assets,
resulting in a charge to earnings; errors in the production, labeling or
packaging of products compounded by our compounded sterile preparations
(CSP) business; and other economic, business, competitive, legal, tax,
regulatory and/or operational factors affecting AmerisourceBergen'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, 2015 and elsewhere in that report and
(ii) in other reports filed by the Company pursuant to the Securities
Exchange Act.
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AMERISOURCEBERGEN CORPORATION
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FINANCIAL SUMMARY
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(In thousands, except per share data)
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(unaudited)
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Three
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Three
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Months Ended
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Months Ended
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December 31,
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% of
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December 31,
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% of
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%
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2015
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Revenue
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2014
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Revenue
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Change
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Revenue
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$
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36,709,046
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$
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33,588,602
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9.3
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%
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Cost of goods sold
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35,744,169
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32,836,303
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8.9
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%
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Gross profit (1)
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964,877
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2.63
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%
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752,299
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2.24
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%
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28.3
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%
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Operating expenses:
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Distribution, selling and administrative
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528,296
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1.44
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%
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416,491
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1.24
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%
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26.8
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%
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Depreciation and amortization
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81,438
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0.22
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%
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49,297
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0.15
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%
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65.2
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%
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Warrants
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467,375
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1.27
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%
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371,405
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1.11
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%
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25.8
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%
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Employee severance, litigation and other
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18,868
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0.05
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%
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3,503
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0.01
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%
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Pension settlement charge
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48,731
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0.13
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%
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-
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-
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%
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Total operating expenses
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1,144,708
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3.12
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%
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840,696
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2.50
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%
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36.2
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%
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Operating loss
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(179,831
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)
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-0.49
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%
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(88,397
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)
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-0.26
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%
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103.4
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%
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Other (income) loss
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(310
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)
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-
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%
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1,314
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-
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%
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Interest expense, net
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30,879
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0.08
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%
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17,342
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0.05
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%
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78.1
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%
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Loss before income taxes
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(210,400
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)
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-0.57
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%
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(107,053
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)
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-0.32
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%
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96.5
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%
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Income tax (benefit) expense
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(540,777
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)
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-1.47
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%
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92,894
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0.28
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%
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Net income (loss)
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$
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330,377
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0.90
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%
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($199,947
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)
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-0.60
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%
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Earnings per share:
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Basic
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$
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1.60
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($0.91
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)
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275.8
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%
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Diluted
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$
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1.46
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($0.91
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)
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260.4
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%
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Weighted average common shares outstanding:
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Basic
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206,180
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219,456
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-6.0
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%
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Diluted (2)
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226,718
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219,456
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3.3
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%
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(1) Includes a $101.6 million LIFO expense charge and a
$12.8 million gain from antitrust litigation settlements in the
three months ended December 31, 2015. Includes a $144.0 million LIFO
expense charge in the three months ended December 31, 2014.
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(2) As a result of the net loss in the three months ended
December 31, 2014, stock options, restricted stock, restricted stock
units and the Warrants issued to Walgreens Boots Alliance, Inc. were
anti-dilutive.
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AMERISOURCEBERGEN CORPORATION
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GAAP TO NON-GAAP RECONCILIATIONS
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(in thousands, except per share data)
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(unaudited)
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Three Months Ended December 31, 2015
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Gross Profit
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Operating Expenses
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Operating (Loss) Income
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Interest Expense, Net
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(Loss) Income Before Income Taxes
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Income Tax (Benefit) Expense
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Net Income
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Diluted Earnings Per Share
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GAAP
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$
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964,877
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$
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1,144,708
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($179,831
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)
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$
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30,879
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($210,400
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)
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($540,777
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)
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$
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330,377
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$
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1.46
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Warrant expense (1)
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-
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(467,375
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)
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467,375
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(2,155
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)
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469,530
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629,189
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(159,659
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)
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(0.71
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Gain on antitrust litigation settlements
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(12,791
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)
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-
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(12,791
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-
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(12,791
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)
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(4,521
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)
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(8,270
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)
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(0.04
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LIFO expense
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101,562
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-
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101,562
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-
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101,562
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35,901
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65,661
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0.29
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Acquisition-related intangibles amortization
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-
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(31,210
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)
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31,210
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-
|
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31,238
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11,042
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20,196
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0.09
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Employee severance, litigation and other
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-
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(18,868
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)
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18,868
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-
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18,868
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6,670
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|
|
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12,198
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|
|
0.05
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Pension settlement charge
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-
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(48,731
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)
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48,731
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|
-
|
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|
48,731
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|
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|
17,226
|
|
|
|
31,505
|
|
|
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
|
|
$
|
1,053,648
|
|
|
$
|
578,524
|
|
|
$
|
475,124
|
|
|
$
|
28,724
|
|
|
$
|
446,738
|
|
|
$
|
154,730
|
|
|
$
|
292,008
|
|
|
$
|
1.27
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP % changes vs. prior year period
|
|
|
17.6
|
%
|
|
|
25.6
|
%
|
|
|
9.1
|
%
|
|
|
88.9
|
%
|
|
|
6.5
|
%
|
|
|
-2.6
|
%
|
|
|
12.1
|
%
|
|
|
11.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of Revenue:
|
|
GAAP
|
|
Adjusted Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
2.63
|
%
|
|
|
2.87
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
3.12
|
%
|
|
|
1.58
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
-0.49
|
%
|
|
|
1.29
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Company received a private letter ruling from the
Internal Revenue Service in November 2015, which entitles it to an
income tax deduction equal to the fair value of the Warrants on the
date of exercise. As a result, the Company recognized a tax benefit
adjustment of approximately $456 million, which represented the
estimated tax deduction for the increase in the fair value of the
Warrants from the issuance date through September 30, 2015. An
additional tax benefit of approximately $173 million was recognized
primarily related to the change in the fair value of the Warrants
during the three months ended December 31, 2015. 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 do 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. The non-GAAP financial measures should be viewed in
addition to, and not in lieu of, financial measures calculated in
accordance with GAAP.
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
GAAP TO NON-GAAP RECONCILIATIONS
|
(in thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2014
|
|
|
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
|
|
$
|
752,299
|
|
|
$
|
840,696
|
|
|
|
($88,397
|
)
|
|
$
|
17,342
|
|
|
|
($107,053
|
)
|
|
$
|
92,894
|
|
|
($199,947
|
)
|
|
$
|
(0.91
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant expense (1)
|
|
|
-
|
|
|
|
(371,405
|
)
|
|
|
371,405
|
|
|
|
(2,140
|
)
|
|
|
373,545
|
|
|
|
7,140
|
|
|
366,405
|
|
|
|
1.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO expense
|
|
|
144,024
|
|
|
|
-
|
|
|
|
144,024
|
|
|
|
-
|
|
|
|
144,024
|
|
|
|
55,496
|
|
|
88,528
|
|
|
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
|
-
|
|
|
|
(5,032
|
)
|
|
|
5,032
|
|
|
|
-
|
|
|
|
5,330
|
|
|
|
2,054
|
|
|
3,276
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee severance, litigation and other
|
|
|
-
|
|
|
|
(3,503
|
)
|
|
|
3,503
|
|
|
|
-
|
|
|
|
3,503
|
|
|
|
1,350
|
|
|
2,153
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
|
|
$
|
896,323
|
|
|
$
|
460,756
|
|
|
$
|
435,567
|
|
|
$
|
15,202
|
|
|
$
|
419,349
|
|
|
$
|
158,934
|
|
$
|
260,415
|
|
|
$
|
1.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of Revenue:
|
|
GAAP
|
|
Adjusted Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
2.24
|
%
|
|
|
2.67
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
2.50
|
%
|
|
|
1.37
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
-0.26
|
%
|
|
|
1.30
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) During the three months ended December 31, 2014, the
amount of Warrant expense deductible for income tax purposes was
based on the initial valuation 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.
|
|
|
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. The non-GAAP financial measures should be viewed in
addition to, and not in lieu of, financial measures calculated in
accordance with GAAP.
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
RECONCILIATION OF DILUTED SHARES OUTSTANDING (GAAP TO NON-GAAP)
|
(In thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
Basic shares outstanding
|
|
206,180
|
|
219,456
|
|
|
|
|
|
Stock option, restricted stock, and restricted stock unit dilution
|
|
3,858
|
|
-
|
|
|
|
|
|
Warrant dilution
|
|
16,680
|
|
-
|
|
|
|
|
|
GAAP diluted shares outstanding
|
|
226,718
|
|
219,456
|
|
|
|
|
|
Warrant dilution (1)
|
|
(16,680)
|
|
-
|
|
|
|
|
|
Shares repurchased under special share repurchase programs (1)
|
|
19,904
|
|
4,839
|
|
|
|
|
|
Stock option, restricted stock, and restricted stock unit dilution (2)
|
|
-
|
|
4,990
|
|
|
|
|
|
Non-GAAP diluted shares outstanding
|
|
229,942
|
|
229,285
|
|
|
|
|
|
(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 special
share repurchase programs, which were established to mitigate the
potentially dilutive effect of the Warrants and supplement the
Company's 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
|
WARRANT COVERAGE INFORMATION
|
(in millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
2016 Warrant Coverage:
|
|
December 31, 2015 (1)
|
Shares from 2016 Capped Calls
|
|
11.5
|
Share Repurchases
|
|
11.2
|
Total Shares Covered
|
|
22.7
|
|
|
|
|
|
2016 Warrant Shares
|
|
22.7
|
2016 Warrant Coverage
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Warrant Coverage:
|
|
|
Shares from 2017 Capped Calls
|
|
10.5
|
Share Repurchases
|
|
8.9
|
Total Shares Covered
|
|
19.4
|
|
|
|
|
|
2017 Warrant Shares
|
|
22.7
|
2017 Warrant Coverage
|
|
85%
|
|
|
|
|
|
(1) Based on December 31, 2015 closing stock price of
$103.71.
|
|
|
|
Estimated Number of Shares to be Received Upon Exercise of
Capped Calls (at various illustrative ABC share prices) (in
millions)
|
|
|
|
|
|
Illustrative ABC Share Price (2)
|
|
2016 Capped Calls
|
|
2017 Capped Calls
|
|
|
|
|
|
$85
|
|
13.3
|
|
12.8
|
$90
|
|
13.2
|
|
12.1
|
$95
|
|
12.6
|
|
11.4
|
$100
|
|
12.0
|
|
10.9
|
$105
|
|
11.4
|
|
10.3
|
$110
|
|
10.9
|
|
9.9
|
$115
|
|
10.4
|
|
9.4
|
$120
|
|
10.0
|
|
9.1
|
|
|
|
|
|
(2) An ABC share price below $85 will increase the number
of shares to be received up to a maximum of 13.6 million shares for
the 2016 and 2017 Capped Calls, respectively.
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
SUMMARY SEGMENT INFORMATION
|
(dollars in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
Revenue
|
|
2015
|
|
2014
|
|
% Change
|
|
|
|
|
|
|
|
Pharmaceutical Distribution
|
|
$
|
35,194,679
|
|
|
$
|
32,982,724
|
|
|
6.7
|
%
|
Other
|
|
|
1,577,815
|
|
|
|
696,001
|
|
|
126.7
|
%
|
Intersegment eliminations
|
|
|
(63,448
|
)
|
|
|
(90,123
|
)
|
|
-29.6
|
%
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
36,709,046
|
|
|
$
|
33,588,602
|
|
|
9.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
Operating loss
|
|
2015
|
|
2014
|
|
% Change
|
|
|
|
|
|
|
|
Pharmaceutical Distribution
|
|
$
|
379,559
|
|
|
$
|
390,401
|
|
|
-2.8
|
%
|
Other
|
|
|
95,565
|
|
|
|
45,166
|
|
|
111.6
|
%
|
Total segment operating income
|
|
|
475,124
|
|
|
|
435,567
|
|
|
9.1
|
%
|
|
|
|
|
|
|
|
Gains on antitrust litigation settlements
|
|
|
12,791
|
|
|
|
-
|
|
|
|
LIFO expense
|
|
|
(101,562
|
)
|
|
|
(144,024
|
)
|
|
|
Acquisition-related intangibles amortization
|
|
|
(31,210
|
)
|
|
|
(5,032
|
)
|
|
|
Warrant expense
|
|
|
(467,375
|
)
|
|
|
(371,405
|
)
|
|
|
Employee severance, litigation and other
|
|
|
(18,868
|
)
|
|
|
(3,503
|
)
|
|
|
Pension settlement charge
|
|
|
(48,731
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
($179,831
|
)
|
|
|
($88,397
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical Distribution
|
|
|
|
|
|
|
Gross profit
|
|
|
2.19
|
%
|
|
|
2.28
|
%
|
|
|
Operating expenses
|
|
|
1.11
|
%
|
|
|
1.10
|
%
|
|
|
Operating income
|
|
|
1.08
|
%
|
|
|
1.18
|
%
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Gross profit
|
|
|
17.85
|
%
|
|
|
20.73
|
%
|
|
|
Operating expenses
|
|
|
11.80
|
%
|
|
|
14.24
|
%
|
|
|
Operating income
|
|
|
6.06
|
%
|
|
|
6.49
|
%
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (GAAP)
|
|
|
|
|
|
|
Gross profit
|
|
|
2.63
|
%
|
|
|
2.24
|
%
|
|
|
Operating expenses
|
|
|
3.12
|
%
|
|
|
2.50
|
%
|
|
|
Operating loss
|
|
|
-0.49
|
%
|
|
|
-0.26
|
%
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (Non-GAAP)
|
|
|
|
|
|
|
Gross profit
|
|
|
2.87
|
%
|
|
|
2.67
|
%
|
|
|
Operating expenses
|
|
|
1.58
|
%
|
|
|
1.37
|
%
|
|
|
Operating income
|
|
|
1.29
|
%
|
|
|
1.30
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
December 31,
|
|
September 30,
|
|
|
2015
|
|
2015
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
978,090
|
|
$
|
2,167,442
|
Accounts receivable, net
|
|
|
8,380,652
|
|
|
8,222,951
|
Merchandise inventories
|
|
|
10,863,974
|
|
|
9,755,094
|
Prepaid expenses and other
|
|
|
138,959
|
|
|
189,001
|
Total current assets
|
|
|
20,361,675
|
|
|
20,334,488
|
|
|
|
|
|
Property and equipment, net
|
|
|
1,059,501
|
|
|
979,251
|
Goodwill and other intangible assets
|
|
|
9,052,837
|
|
|
6,123,944
|
Other long-term assets
|
|
|
281,789
|
|
|
298,474
|
|
|
|
|
|
Total assets
|
|
$
|
30,755,802
|
|
$
|
27,736,157
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
22,536,323
|
|
$
|
20,886,439
|
Other current liabilities
|
|
|
1,488,018
|
|
|
1,814,326
|
Total current liabilities
|
|
|
24,024,341
|
|
|
22,700,765
|
|
|
|
|
|
Long-term debt
|
|
|
4,393,317
|
|
|
3,493,048
|
|
|
|
|
|
Other long-term liabilities
|
|
|
1,038,125
|
|
|
908,824
|
|
|
|
|
|
Stockholders' equity
|
|
|
1,300,019
|
|
|
633,520
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
30,755,802
|
|
$
|
27,736,157
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
Three
|
|
Three
|
|
|
Months Ended
|
|
Months Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
Net income (loss)
|
|
$
|
330,377
|
|
|
|
($199,947
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities (1)
|
|
|
11,157
|
|
|
|
420,754
|
|
Changes in operating assets and liabilities, excluding the effects
of acquisitions:
|
|
|
|
|
Accounts receivable
|
|
|
(76,261
|
)
|
|
|
(766,718
|
)
|
Merchandise inventories (2)
|
|
|
(1,086,296
|
)
|
|
|
(2,096,578
|
)
|
Accounts payable, accrued expenses, and income taxes
|
|
|
1,522,332
|
|
|
|
3,529,971
|
|
Other
|
|
|
49,539
|
|
|
|
9,482
|
|
Net cash provided by operating activities
|
|
|
750,848
|
|
|
|
896,964
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
Capital expenditures
|
|
|
(90,110
|
)
|
|
|
(52,557
|
)
|
Cost of acquired companies, net of cash acquired
|
|
|
(2,726,632
|
)
|
|
|
(24,604
|
)
|
Net proceeds from investment in available-for-sale securities
|
|
|
47,693
|
|
|
|
-
|
|
Other
|
|
|
(3,438
|
)
|
|
|
5
|
|
Net cash used in investing activities
|
|
|
(2,772,487
|
)
|
|
|
(77,156
|
)
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
Net borrowings
|
|
|
1,008,544
|
|
|
|
-
|
|
Purchases of common stock (3)
|
|
|
(118,575
|
)
|
|
|
(300,213
|
)
|
Exercises of stock options
|
|
|
33,980
|
|
|
|
40,164
|
|
Cash dividends on common stock
|
|
|
(71,199
|
)
|
|
|
(64,025
|
)
|
Other
|
|
|
(20,463
|
)
|
|
|
(5,491
|
)
|
Net cash provided by (used in) financing activities
|
|
|
832,287
|
|
|
|
(329,565
|
)
|
|
|
|
|
|
(Decrease) increase in cash and cash equivalents
|
|
|
(1,189,352
|
)
|
|
|
490,243
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
2,167,442
|
|
|
|
1,808,513
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
978,090
|
|
|
$
|
2,298,756
|
|
|
|
|
|
|
(1) Adjustments include non-cash warrant expense of
$467.4 million and $371.4 million for the three months ended
December 31, 2015 and 2014, respectively.
|
|
|
(2) Merchandise inventories include LIFO expense of
$101.6 million and $144.0 million for the three months ended
December 31, 2015 and 2014, respectively.
|
|
|
(3) Includes purchases made under special share
repurchase programs totaling $118.6 million in the three months
ended December 31, 2015. Includes purchases made under special share
repurchase programs totaling $150.2 million in the three months
ended December 31, 2014, which includes $18.0 million of fiscal 2014
purchases that cash settled in October 2014.
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160204005358/en/
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