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AmerisourceBergen Reports Fiscal 2019 Second Quarter Results

BusinessWire

Revenues of $43.3 billion for the Second Quarter, a 5.6 Percent
Increase Year-Over-Year

Second Quarter GAAP Diluted EPS of $0.13 and Adjusted Diluted EPS of
$2.11

Adjusted Diluted EPS Guidance Range Raised to $6.70 to $6.90 for
Fiscal 2019

VALLEY FORGE, Pa.–(BUSINESS WIRE)–AmerisourceBergen Corporation (NYSE:ABC) today reported that in its
fiscal year 2019 second quarter ended March 31, 2019, revenue increased
5.6 percent to $43.3 billion. On the basis of U.S. generally accepted
accounting principles (GAAP), diluted earnings per share (EPS) was $0.13
for the March quarter of fiscal 2019, compared to $1.29 in the prior
year quarter. Adjusted diluted EPS, which is a non-GAAP measure that
excludes items described below, increased 8.8% to $2.11 in the fiscal
second quarter.

The Company raised its adjusted diluted EPS guidance range for fiscal
2019 to $6.70 to $6.90, from $6.65 to $6.85 previously. The Company does
not provide forward-looking guidance on a GAAP basis, as discussed below
in Fiscal Year 2019 Expectations.

“AmerisourceBergen continues to execute and deliver strong performance
with good growth in customer volumes, double-digit Specialty
distribution growth and overall strong execution across both the
Pharmaceutical Distribution Services and Global Commercialization
Services & Animal Health groups this quarter,” said Steven H. Collis,
Chairman, President and Chief Executive Officer of AmerisourceBergen.

“As we move into the second half of the year, our fiscal 2019 outlook
remains strong,” Mr. Collis continued. “AmerisourceBergen continues to
be well positioned for long-term growth and we have the utmost
confidence that our differentiated strategy and focus on providing
innovative services and solutions for our partners will continue to
drive sustainable value for all of our stakeholders.”

Second Quarter Fiscal Year 2019 Summary Results

         
    GAAP   Adjusted (Non-GAAP)
Revenue   $43.3B   $43.3B
Gross Profit   $1.4B   $1.3B
Operating Expenses   $1,377M   $702M
Operating Income   $48M   $617M
Interest Expense, Net   $43M   $43M
Effective Tax Rate   (49.5)%   21.5%
Net Income Attributable to ABC   $27M   $449M
Diluted Earnings Per Share   $0.13   $2.11
Diluted Shares Outstanding   213M   213M

Below, AmerisourceBergen presents descriptive summaries of the Company’s
GAAP and adjusted (non-GAAP) quarterly results. In the tables that
follow, GAAP results and GAAP to non-GAAP reconciliations are presented.
For more information related to non-GAAP financial measures, including
adjustments made in the periods presented, please refer to the
Supplemental Information Regarding non-GAAP Financial Measures following
the tables.

Second Quarter GAAP Results

Second Quarter Adjusted (non-GAAP) Results

Segment Discussion

The Company’s operations are comprised of the Pharmaceutical
Distribution Services reportable segment and other operating segments
that are not significant enough to require separate reportable segment
disclosure and, therefore, have been included in Other for the purpose
of reportable segment presentation. Other consists of operating segments
that focus on global commercialization services and animal health and
includes AmerisourceBergen Consulting Services (ABCS), World Courier
and MWI Animal Health (MWI).

Pharmaceutical Distribution Services Segment

Pharmaceutical Distribution Services revenue was $41.7 billion, an
increase of 5.6 percent compared to the same quarter in the prior fiscal
year primarily due to the growth of some of its largest customers,
continued strong specialty product sales, and overall market growth.
Segment operating income of $517.0 million in the second quarter of
fiscal 2019 was up 5.7 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.

Other

Revenue in Other was $1.7 billion in the second quarter of fiscal 2019,
an increase of 4.5 percent compared to the same period in the prior
fiscal year, primarily due to ABCS’s growth in its Canadian operations
and growth at World Courier and MWI. Operating income in Other increased
2.9 percent to $99.9 million in the second quarter of fiscal 2019. This
increase was primarily driven by increases in operating income at ABCS’s
Canadian operations and World Courier.

Recent Company Highlights & Milestones

Fiscal Year 2019 Expectations

The Company does not provide forward-looking guidance on a GAAP basis as
certain financial information, the probable significance of which cannot
be determined, is not available and cannot be reasonably estimated.
Please refer to the Supplemental Information Regarding Non-GAAP
Financial Measures following the tables for additional information.

Fiscal Year 2019 Expectations on an Adjusted
(non-GAAP) Basis

AmerisourceBergen has updated its fiscal year 2019 financial guidance to
reflect the Company’s continued solid execution and greater than
anticipated number of share repurchases. The company now expects:

Additional expectations now include:

All other previously communicated aspects of the Company’s fiscal year
2019 financial guidance and assumptions remain the same.

Conference Call & Slide Presentation

The Company will host a conference call to discuss the results at 8:30
a.m. ET on May 2, 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:

The dial-in number for the live call will be (612) 326-1019. 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 465792.

Upcoming Investor Events

AmerisourceBergen management will be attending the following investor
conference in the coming months:

Please check the website for updates regarding the timing of the live
presentation webcasts, if any, and for replay information.

About AmerisourceBergen

AmerisourceBergen provides pharmaceutical products, value-driving
services and business solutions that improve access to care. Tens of
thousands of healthcare providers, veterinary practices and livestock
producers trust us as their partner in the pharmaceutical supply chain.
Global manufacturers depend on us for services that drive commercial
success for their products. Through our daily work—and powered by our
21,000 associates—we are united in our responsibility to create
healthier futures. AmerisourceBergen is ranked #12 on the Fortune 500,
with more than $160 billion in annual revenue. The company is
headquartered in Valley Forge, Pa. and has a presence in 50+ countries.
Learn more at investor.amerisourcebergen.com.

AmerisourceBergen’s Cautionary Note Regarding Forward-Looking
Statements

Certain of the statements contained in this press release are
“forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Words such as “expect,” “likely,” “outlook,” “forecast,” “would,”
“could,” “should,” “can,” “project,” “intend,” “plan,” “continue,”
“sustain,” “synergy,” “on track,” “believe,” “seek,” “estimate,”
“anticipate,” “may,” “possible,” “assume,” variations of such words, and
similar expressions are intended to identify such forward-looking
statements. These statements are based on management’s current
expectations and are subject to uncertainty and changes in
circumstances. These statements are not guarantees of future performance
and are based on assumptions that could prove incorrect or could cause
actual results to vary materially from those indicated. Among the
factors that could cause actual results to differ materially from those
projected, anticipated, or implied are the following: unfavorable trends
in brand and generic pharmaceutical pricing, including in rate or
frequency of price inflation or deflation; competition and industry
consolidation of both customers and suppliers resulting in increasing
pressure to reduce prices for our products and services; changes in
pharmaceutical market growth rates; changes in the United States
healthcare and regulatory environment, including changes that could
impact prescription drug reimbursement under Medicare and Medicaid;
increasing governmental regulations regarding the pharmaceutical supply
channel and pharmaceutical compounding; declining reimbursement rates
for pharmaceuticals; federal and state government enforcement
initiatives to detect and prevent suspicious orders of controlled
substances and the diversion of controlled substances; increased public
concern over the abuse of opioid medications; prosecution or suit by
federal, state and other governmental entities of alleged violations of
laws and regulations regarding controlled substances, and any related
disputes, including shareholder derivative lawsuits; increased federal
scrutiny and litigation, including qui tam litigation, for alleged
violations of laws and regulations governing the marketing, sale,
purchase and/or dispensing of pharmaceutical products or services, and
associated reserves and costs; material adverse resolution of pending
legal proceedings; the retention of key customer or supplier
relationships under less favorable economics or the adverse resolution
of any contract or other dispute with customers or suppliers; changes to
customer or supplier payment terms; risks associated with the strategic,
long-term relationship between Walgreens Boots Alliance, Inc. and the
Company, including principally with respect to the pharmaceutical
distribution agreement and/or the global generic purchasing services
arrangement; changes in tax laws or legislative initiatives that could
adversely affect the Company’s tax positions and/or the Company’s tax
liabilities or adverse resolution of challenges to the Company’s tax
positions; regulatory or enforcement action, including a consent decree,
in connection with the production, labeling or packaging of products
compounded by our compounded sterile preparations (CSP) business;
suspension of production of CSPs, including continued suspension at our
Memphis facility; managing foreign expansion, including non-compliance
with the U.S. Foreign Corrupt Practices Act, anti-bribery laws, economic
sanctions and import laws and regulations; financial market volatility
and disruption; substantial defaults in payment, material reduction in
purchases by or the loss, bankruptcy or insolvency of a major customer;
the loss, bankruptcy or insolvency of a major supplier; changes to the
customer or supplier mix; malfunction, failure or breach of
sophisticated information systems to operate as designed; risks
generally associated with data privacy regulation and the international
transfer of personal data; natural disasters or other unexpected events
that affect the Company’s operations; the impairment of goodwill or
other intangible assets (including 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 H. D. Smith and PharMEDium, or the inability to capture all of the
anticipated synergies related thereto or to capture the anticipated
synergies within the expected time period; the fact the acquisition of
H. D. Smith may make it more difficult to establish or maintain
relationships with employees, suppliers, customers and other business
partners; 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.

         

AMERISOURCEBERGEN CORPORATION

FINANCIAL SUMMARY

(In thousands, except per share data)

(unaudited)

 
Three

Months Ended

March 31, 2019

% of

Revenue

Three

Months Ended

March 31, 2018

% of

Revenue

%

Change

Revenue $ 43,319,602 $ 41,033,858 5.6%
 
Cost of goods sold 41,894,846   39,778,175   5.3%
 
Gross profit 1 1,424,756 3.29% 1,255,683 3.06% 13.5%
 
Operating expenses:
Distribution, selling, and administrative 628,036 1.45% 617,426 1.50% 1.7%
Depreciation and amortization 123,766 0.29% 119,388 0.29% 3.7%
Employee severance, litigation, and other 2 55,389 37,449
Impairment of long-lived assets 3 570,000   —  
Total operating expenses 1,377,191 3.18% 774,263 1.89% 77.9%
 
Operating income 47,565 0.11% 481,420 1.17% (90.1)%
 
Other (income) loss 4 (14,494 ) 29,123
Interest expense, net 43,275 48,637 (11.0)%
Loss on consolidation of equity investments —   42,328  
 
Income before income taxes 18,784 0.04% 361,332 0.88% (94.8)%
 
Income tax (benefit) expense (9,289 ) 79,172  
 
Net income 28,073 0.06% 282,160 0.69% (90.1)%
 
Net (income) loss attributable to noncontrolling interest (938 ) 5,295  
 
Net income attributable to AmerisourceBergen Corporation $ 27,135   0.06% $ 287,455   0.70% (90.6)%
 
Earnings per share:
Basic $ 0.13 $ 1.31 (90.1)%
Diluted $ 0.13 $ 1.29 (89.9)%
 
Weighted average common shares outstanding:
Basic 210,934 219,200 (3.8)%
Diluted 212,563 222,303 (4.4)%

Contacts

Bennett S. Murphy
Vice President, Investor Relations
610-727-3693
bmurphy@amerisourcebergen.com

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