|
Delaware
|
|
23-3079390
|
||
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
||
incorporation or organization)
|
|
Identification No.)
|
||
|
|
|
|
|
1300 Morris Drive
|
Chesterbrook,
|
PA
|
|
19087-5594
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of exchange on which registered
|
|
Common stock
|
ABC
|
New York Stock Exchange
|
(NYSE)
|
|
||||
|
Exhibit Number
|
|
Description of Exhibit
|
|
|
|
99.1
|
|
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as inline XBRL)
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
|
|
|
|
Date:
|
January 30, 2020
|
By:
|
/s/ James F. Cleary
|
|
|
Name:
|
James F. Cleary
|
|
|
Title:
|
Executive Vice President & Chief Financial Officer
|
|
|
|
AmerisourceBergen Corporation
|
|
P.O. Box 959
|
|
Valley Forge, PA 19482
|
|
GAAP
|
Adjusted (Non-GAAP)
|
Revenue
|
$47.9B
|
$47.9B
|
Gross Profit
|
$1.2B
|
$1.2B
|
Operating Expenses
|
$968M
|
$748M
|
Operating Income
|
$263M
|
$495M
|
Interest Expense, Net
|
$31M
|
$31M
|
Effective Tax Rate
|
18.7%
|
21.0%
|
Net Income Attributable to ABC
|
$188M
|
$365M
|
Diluted Earnings Per Share
|
$0.90
|
$1.76
|
Diluted Shares Outstanding
|
208M
|
208M
|
•
|
Revenue: In the first quarter of fiscal 2020, revenue was $47.9 billion, up 5.4 percent compared to the same quarter in the previous fiscal year, reflecting a 5.2 percent increase in Pharmaceutical Distribution Services revenue and a 10.5 percent increase in revenue within Other.
|
•
|
Gross Profit: Gross profit in the fiscal 2020 first quarter was $1.2 billion, a 5.1 percent decrease compared to the same period in the previous fiscal year. Gross profit in the current year quarter was unfavorably impacted by lower gains from antitrust litigation settlements, a LIFO expense in the current year quarter in comparison to a LIFO credit in the prior year quarter, and the prior year reversal of a previously estimated assessment related to the New York State Opioid Stewardship Act, offset in part by the increases in gross profit in Other and Pharmaceutical Distribution Services. Gross profit as a percentage of revenue was 2.57 percent, a decrease of 29 basis points from the prior year quarter.
|
•
|
Operating Expenses: In the first quarter of fiscal 2020, operating expenses were $967.8 million, compared to $819.8 million in the same period last fiscal year. The increase in operating expenses was primarily due to the $138.0 million impairment of PharMEDium's long-lived assets and an increase in distribution, selling and administrative expenses in the quarter, partially offset by lower depreciation and amortization expense. Operating expenses as a percentage of revenue in the fiscal 2020 first quarter was 2.02 percent, compared to 1.81 percent for the same period in the previous fiscal year.
|
•
|
Operating Income: In the fiscal 2020 first quarter, operating income declined to $263.4 million from $477.8 million in the prior year quarter due to the increase in operating expenses and the decrease in gross profit. Operating income as a percentage of revenue was 0.55 percent in the first quarter of fiscal 2020, compared to 1.05 percent for the same period in the previous fiscal year.
|
•
|
Interest Expense, Net: In the fiscal 2020 first quarter, net interest expense of $31.0 million was down 26.5 percent versus the prior year quarter due to certain finance leases now being accounted for as operating leases, resulting from the adoption of the new lease accounting standard, and higher interest income.
|
•
|
Effective Tax Rate: The effective tax rate was 18.7 percent for the first quarter of fiscal 2020. The effective tax rate in the quarter was primarily impacted by the $138.0 million impairment of PharMEDium's long-lived assets. The prior year's first quarter effective tax rate of 9.4 percent was favorably impacted by the 2017 Tax Cuts and Jobs Act.
|
•
|
Diluted Earnings Per Share: Diluted earnings per share was $0.90 in the first quarter of fiscal 2020 compared to $1.84 in the previous fiscal year’s first quarter. This decline was primarily due to a decrease in operating income.
|
•
|
Diluted Shares Outstanding: Diluted weighted average shares outstanding for the first quarter of fiscal 2020 were 207.5 million, a 3.0 percent decline versus the prior fiscal year first quarter primarily due to share repurchases.
|
•
|
In late January 2020 the Company decided to exit the PharMEDium compounding business and as a result, the Company will cease all commercial and administrative operations related to this business. The decision to exit the PharMEDium business was due to a number of factors including, but not limited to, ongoing operational, regulatory, and commercial challenges, such as PharMEDium's decision in January 2020 to suspend production at the compounding facility in New Jersey pending facility upgrades related to the air handling and filtration systems. In addition to the PharMEDium impairment charge of $138 million recognized in the three months ended December 31, 2019, the Company expects it will impair the majority of the remaining $55 million of PharMEDium tangible assets and all of the remaining $185 million of PharMEDium intangible assets in the three months ending March 31, 2020. Additionally, the Company will incur other costs, such as employee separation costs, in connection with exiting the PharMEDium compounding business during the fiscal year ending September 30, 2020 estimated to total approximately $80 million to $100 million.
|
•
|
As a result of the decision to exit the PharMEDium compounding business, the Company expects to claim an ordinary income tax deduction and estimates that it will realize a cash tax benefit in fiscal 2020 through fiscal 2022 totaling approximately $500 million to $600 million.
|
•
|
Revenue: No adjustments were made to the GAAP presentation of revenue. In the first quarter of fiscal 2020, revenue was $47.9 billion, up 5.4 percent compared to the same quarter in the previous fiscal year, reflecting a 5.2 percent increase in Pharmaceutical Distribution Services revenue and a 10.5 percent increase in revenue within Other.
|
•
|
Adjusted Gross Profit: Adjusted gross profit in the fiscal 2020 first quarter was $1.2 billion, which was up 3.3 percent compared to the same period in the previous year, due to the increases in gross profit in Other and Pharmaceutical Distribution Services. Adjusted gross profit as a percentage of revenue was 2.60 percent in the fiscal 2020 first quarter, a decrease of 5 basis points from the prior year quarter.
|
•
|
Adjusted Operating Expenses: In the first quarter of fiscal 2020, adjusted operating expenses were $747.9 million, an increase of 2.3 percent compared to the same period in the previous fiscal year primarily due to an increase in costs to support revenue growth, offset in part by operational synergies realized from the integration of H. D. Smith. Adjusted operating expenses as a percentage of revenue in the fiscal 2020 first quarter was 1.56 percent, compared to 1.61 percent for the same period in the previous fiscal year.
|
•
|
Adjusted Operating Income: In the fiscal 2020 first quarter, adjusted operating income of $495.3 million increased 5.0 percent from the prior year period due to a 5.0 percent increase in operating income within Pharmaceutical Distribution Services and a 5.6 percent increase in operating income within Other. Adjusted operating income as a percentage of revenue decreased 1 basis point to 1.03 percent in the fiscal 2020 first quarter compared to the previous fiscal year’s first quarter.
|
•
|
Interest Expense, Net: No adjustments were made to the GAAP presentation of net interest expense. In the fiscal 2020 first quarter, net interest expense of $31.0 million was down 26.5 percent versus the prior year quarter due to certain finance leases now being accounted for as operating leases, resulting from the adoption of the new lease accounting standard, and higher interest income.
|
•
|
Adjusted Effective Tax Rate: The adjusted effective tax rate was 21.0 percent for the first quarter of fiscal 2020 and was 19.9 percent in the previous fiscal year’s first quarter. The adjusted effective tax rate in the prior year quarter was favorably impacted by a discrete state tax item.
|
•
|
Adjusted Diluted Earnings Per Share: Adjusted diluted earnings per share was up 10.0 percent to $1.76 in the first quarter of fiscal 2020 compared to $1.60 in the previous fiscal year’s first quarter, driven by the increase in adjusted operating income, a lower share count, and lower net interest expense.
|
•
|
Diluted Shares Outstanding: No adjustments were made to the GAAP presentation of diluted shares outstanding. Diluted weighted average shares outstanding for the first quarter of fiscal 2020 were 207.5 million, a 3.0 percent decline versus the prior fiscal year first quarter primarily due to share repurchases.
|
•
|
AmerisourceBergen enhanced its logistics offering by integrating two of its businesses, World Courier, a global logistics provider, and ICS, a third party logistics (3PL) provider, creating the first and only specialty logistics partner to deliver complete support from clinical trials through commercialization. The integration offers enhanced global capabilities for manufacturers navigating the complexities of their product’s journey end-to-end, ultimately progressing the global growth of the advanced therapy industry and enabling more patients to be treated with these life-changing products.
|
•
|
AmerisourceBergen was named one of America’s “Most Responsible Companies” by Newsweek magazine and ranked 10th in the Health Care & Life Sciences category.
|
•
|
AmerisourceBergen received a perfect score of 100 on the 2019 Corporate Equality Index, the nation’s premier benchmarking survey and report on corporate policies and practices related to LGBTQ workplace equality, administered by the Human Rights Campaign Foundation.
|
•
|
The AmerisourceBergen Foundation announced a number of grants aimed at improving education and access to care in animal health throughout 2020 and beyond, including new collaborations with the National FFA Foundation, the National Disaster Search Dog Foundation and K9 Partners for Patriots.
|
•
|
Adjusted Diluted EPS to be in the range of $7.55 to $7.80, up from the previous range of $7.30 to $7.60.
|
•
|
Adjusted operating income growth in the mid-single digit percent range, up from the low-to mid-single percent range;
|
◦
|
Pharmaceutical Distribution Services segment operating income growth in the mid-single digit percent range, up from the low- to mid-single digit percent range;
|
•
|
Weighted average diluted shares are now expected to be approximately 208 million, down from the previous expectation of between 209 million to 210 million for the fiscal year.
|
|
|
Three
Months Ended
December 31, 2019 |
|
% of
Revenue
|
|
Three
Months Ended
December 31, 2018 |
|
% of
Revenue
|
|
%
Change
|
||||
Revenue
|
|
$
|
47,864,742
|
|
|
|
|
$
|
45,392,452
|
|
|
|
|
5.4%
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of goods sold
|
|
46,633,528
|
|
|
|
|
44,094,872
|
|
|
|
|
5.8%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit 1
|
|
1,231,214
|
|
|
2.57%
|
|
1,297,580
|
|
|
2.86%
|
|
(5.1)%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
||||
Distribution, selling, and administrative
|
|
685,953
|
|
|
1.43%
|
|
656,585
|
|
|
1.45%
|
|
4.5%
|
||
Depreciation and amortization
|
|
104,515
|
|
|
0.22%
|
|
122,500
|
|
|
0.27%
|
|
(14.7)%
|
||
Employee severance, litigation, and other 2
|
|
39,309
|
|
|
|
|
40,672
|
|
|
|
|
|
||
Impairment of long-lived assets 3
|
|
138,000
|
|
|
|
|
—
|
|
|
|
|
|
||
Total operating expenses
|
|
967,777
|
|
|
2.02%
|
|
819,757
|
|
|
1.81%
|
|
18.1%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income
|
|
263,437
|
|
|
0.55%
|
|
477,823
|
|
|
1.05%
|
|
(44.9)%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Other loss
|
|
2,842
|
|
|
|
|
3,097
|
|
|
|
|
|
||
Interest expense, net
|
|
31,007
|
|
|
|
|
42,170
|
|
|
|
|
(26.5)%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Income before income taxes
|
|
229,588
|
|
|
0.48%
|
|
432,556
|
|
|
0.95%
|
|
(46.9)%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax expense
|
|
43,020
|
|
|
|
|
40,803
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Net income
|
|
186,568
|
|
|
0.39%
|
|
391,753
|
|
|
0.86%
|
|
(52.4)%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to noncontrolling interest
|
|
1,072
|
|
|
|
|
1,899
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to AmerisourceBergen Corporation
|
|
$
|
187,640
|
|
|
0.39%
|
|
$
|
393,652
|
|
|
0.87%
|
|
(52.3)%
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
0.91
|
|
|
|
|
$
|
1.86
|
|
|
|
|
(51.1)%
|
Diluted
|
|
$
|
0.90
|
|
|
|
|
$
|
1.84
|
|
|
|
|
(51.1)%
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
206,008
|
|
|
|
|
212,054
|
|
|
|
|
(2.9)%
|
||
Diluted
|
|
207,517
|
|
|
|
|
213,969
|
|
|
|
|
(3.0)%
|
1
|
Includes a $13.3 million LIFO expense, an $8.5 million gain from antitrust litigation settlements, and $7.1 million of PharMEDium remediation costs in the three months ended December 31, 2019. Includes an $87.3 million gain from antitrust litigation settlements, a $22.0 million reversal of a prior period assessment relating to the New York State Opioid Stewardship Act, $17.9 million of PharMEDium remediation costs, and a $3.0 million LIFO credit in the three months ended December 31, 2018.
|
2
|
Includes $0.8 million of employee severance, $24.7 million of litigation and opioid-related costs related to legal fees in connection with opioid lawsuits and investigations, and $13.8 million of other costs in connection with acquisition-related deal and integration costs, business transformation efforts, and other restructuring initiatives in the three months ended December 31, 2019. Includes $4.8 million of employee severance, $14.5 million of litigation costs related to opioid lawsuits and investigations, and $21.4 million of other costs in connection with acquisition-related deal and integration costs, business transformation efforts, and other restructuring initiatives in the three months ended December 31, 2018.
|
3
|
Impairment of finite-lived intangible assets, property and equipment, and right-of-use assets relating to PharMEDium in the three months ended December 31, 2019.
|
|
|
Three Months Ended December 31, 2019
|
|
||||||||||||||||||||||||||||||
|
|
Gross Profit
|
|
Operating
Expenses |
|
Operating
Income |
|
Income
Before Income Taxes |
|
Income Tax
Expense
|
|
Net Loss Attributable to Noncontrolling Interest
|
|
Net Income Attributable
to ABC
|
|
Diluted
Earnings Per Share |
|
||||||||||||||||
GAAP
|
|
$
|
1,231,214
|
|
|
$
|
967,777
|
|
|
$
|
263,437
|
|
|
$
|
229,588
|
|
|
$
|
43,020
|
|
|
$
|
1,072
|
|
|
$
|
187,640
|
|
|
$
|
0.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Gain from antitrust litigation settlements
|
|
(8,492
|
)
|
|
—
|
|
|
(8,492
|
)
|
|
(8,492
|
)
|
|
(1,974
|
)
|
|
—
|
|
|
(6,518
|
)
|
|
(0.03
|
)
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
LIFO expense
|
|
13,281
|
|
|
—
|
|
|
13,281
|
|
|
13,281
|
|
|
3,087
|
|
|
—
|
|
|
10,194
|
|
|
0.05
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
PharMEDium remediation costs
|
|
7,135
|
|
|
(9,030
|
)
|
|
16,165
|
|
|
16,165
|
|
|
3,757
|
|
|
—
|
|
|
12,408
|
|
|
0.06
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Acquisition-related intangibles amortization
|
|
—
|
|
|
(33,566
|
)
|
|
33,566
|
|
|
33,566
|
|
|
7,801
|
|
|
(436
|
)
|
|
25,329
|
|
|
0.12
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Employee severance, litigation, and other
|
|
—
|
|
|
(39,309
|
)
|
|
39,309
|
|
|
39,309
|
|
|
9,136
|
|
|
—
|
|
|
30,173
|
|
|
0.15
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Impairment of long-lived assets
|
|
—
|
|
|
(138,000
|
)
|
|
138,000
|
|
|
138,000
|
|
|
32,071
|
|
|
—
|
|
|
105,929
|
|
|
0.51
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted Non-GAAP
|
|
$
|
1,243,138
|
|
|
$
|
747,872
|
|
|
$
|
495,266
|
|
|
$
|
461,417
|
|
|
$
|
96,898
|
|
|
$
|
636
|
|
|
$
|
365,155
|
|
|
$
|
1.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted Non-GAAP % change vs. prior year period
|
|
3.3
|
%
|
|
2.3
|
%
|
|
5.0
|
%
|
|
8.2
|
%
|
|
14.1
|
%
|
|
|
|
6.4
|
%
|
|
10.0
|
%
|
|
Percentages of Revenue:
|
|
GAAP
|
|
Adjusted
Non-GAAP
|
Gross profit
|
|
2.57%
|
|
2.60%
|
Operating expenses
|
|
2.02%
|
|
1.56%
|
Operating income
|
|
0.55%
|
|
1.03%
|
|
|
Three Months Ended December 31, 2018
|
|
||||||||||||||||||||||||||||||
|
|
Gross Profit
|
|
Operating
Expenses |
|
Operating
Income |
|
Income Before Income Taxes
|
|
Income Tax Expense
|
|
Net Loss Attributable to Noncontrolling Interest
|
|
Net Income Attributable
to ABC
|
|
Diluted
Earnings Per Share |
|
||||||||||||||||
GAAP
|
|
$
|
1,297,580
|
|
|
$
|
819,757
|
|
|
$
|
477,823
|
|
|
$
|
432,556
|
|
|
$
|
40,803
|
|
|
$
|
1,899
|
|
|
$
|
393,652
|
|
|
$
|
1.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Gain from antitrust litigation settlements
|
|
(87,279
|
)
|
|
—
|
|
|
(87,279
|
)
|
|
(87,279
|
)
|
|
(18,470
|
)
|
|
—
|
|
|
(68,809
|
)
|
|
(0.32
|
)
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
LIFO credit
|
|
(3,029
|
)
|
|
—
|
|
|
(3,029
|
)
|
|
(3,029
|
)
|
|
(641
|
)
|
|
—
|
|
|
(2,388
|
)
|
|
(0.01
|
)
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
PharMEDium remediation costs
|
|
17,911
|
|
|
(2,584
|
)
|
|
20,495
|
|
|
20,495
|
|
|
4,337
|
|
|
—
|
|
|
16,158
|
|
|
0.08
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
New York State Opioid Stewardship Act
|
|
(22,000
|
)
|
|
—
|
|
|
(22,000
|
)
|
|
(22,000
|
)
|
|
(4,656
|
)
|
|
—
|
|
|
(17,344
|
)
|
|
(0.08
|
)
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Acquisition-related intangibles amortization
|
|
—
|
|
|
(45,152
|
)
|
|
45,152
|
|
|
45,152
|
|
|
9,555
|
|
|
(506
|
)
|
|
35,091
|
|
|
0.16
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Employee severance, litigation, and other
|
|
—
|
|
|
(40,672
|
)
|
|
40,672
|
|
|
40,672
|
|
|
16,980
|
|
|
—
|
|
|
23,692
|
|
|
0.11
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Tax Reform 1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,997
|
|
|
—
|
|
|
(36,997
|
)
|
|
(0.17
|
)
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted Non-GAAP
|
|
$
|
1,203,183
|
|
|
$
|
731,349
|
|
|
$
|
471,834
|
|
|
$
|
426,567
|
|
|
$
|
84,905
|
|
|
$
|
1,393
|
|
|
$
|
343,055
|
|
|
$
|
1.60
|
|
2
|
Percentages of Revenue:
|
|
GAAP
|
|
Adjusted
Non-GAAP
|
Gross profit
|
|
2.86%
|
|
2.65%
|
Operating expenses
|
|
1.81%
|
|
1.61%
|
Operating income
|
|
1.05%
|
|
1.04%
|
1
|
Amount represents the final measurement period adjustment to the one-time transition tax on historical foreign earnings and profits through December 31, 2017.
|
2
|
The sum of the components does not equal the total due to rounding.
|
|
|
Three Months Ended December 31,
|
||||||||
Revenue
|
|
2019
|
|
2018
|
|
% Change
|
||||
Pharmaceutical Distribution Services
|
|
$
|
46,036,828
|
|
|
$
|
43,744,381
|
|
|
5.2%
|
Other
|
|
1,846,984
|
|
|
1,670,938
|
|
|
10.5%
|
||
Intersegment eliminations
|
|
(19,070
|
)
|
|
(22,867
|
)
|
|
|
||
|
|
|
|
|
|
|
||||
Revenue
|
|
$
|
47,864,742
|
|
|
$
|
45,392,452
|
|
|
5.4%
|
|
|
Three Months Ended December 31,
|
||||||||
Operating income
|
|
2019
|
|
2018
|
|
% Change
|
||||
Pharmaceutical Distribution Services
|
|
$
|
391,694
|
|
|
$
|
373,207
|
|
|
5.0%
|
Other
|
|
104,479
|
|
|
98,934
|
|
|
5.6%
|
||
Intersegment eliminations
|
|
(907
|
)
|
|
(307
|
)
|
|
|
||
Total segment operating income
|
|
495,266
|
|
|
471,834
|
|
|
5.0%
|
||
|
|
|
|
|
|
|
||||
Gain from antitrust litigation settlements
|
|
8,492
|
|
|
87,279
|
|
|
|
||
LIFO (expense) credit
|
|
(13,281
|
)
|
|
3,029
|
|
|
|
||
PharMEDium remediation costs
|
|
(16,165
|
)
|
|
(20,495
|
)
|
|
|
||
New York State Opioid Stewardship Act
|
|
—
|
|
|
22,000
|
|
|
|
||
Acquisition-related intangibles amortization
|
|
(33,566
|
)
|
|
(45,152
|
)
|
|
|
||
Employee severance, litigation, and other
|
|
(39,309
|
)
|
|
(40,672
|
)
|
|
|
||
Impairment of long-lived assets
|
|
(138,000
|
)
|
|
—
|
|
|
|
||
Operating income
|
|
$
|
263,437
|
|
|
$
|
477,823
|
|
|
|
|
|
|
|
|
|
|
||||
Percentages of revenue:
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
||||
Pharmaceutical Distribution Services
|
|
|
|
|
|
|
||||
Gross profit
|
|
1.94%
|
|
2.01%
|
|
|
||||
Operating expenses
|
|
1.09%
|
|
1.16%
|
|
|
||||
Operating income
|
|
0.85%
|
|
0.85%
|
|
|
||||
|
|
|
|
|
|
|
||||
Other
|
|
|
|
|
|
|
||||
Gross profit
|
|
19.01%
|
|
19.45%
|
|
|
||||
Operating expenses
|
|
13.35%
|
|
13.53%
|
|
|
||||
Operating income
|
|
5.66%
|
|
5.92%
|
|
|
||||
|
|
|
|
|
|
|
||||
AmerisourceBergen Corporation (GAAP)
|
|
|
|
|
|
|
||||
Gross profit
|
|
2.57%
|
|
2.86%
|
|
|
||||
Operating expenses
|
|
2.02%
|
|
1.81%
|
|
|
||||
Operating income
|
|
0.55%
|
|
1.05%
|
|
|
||||
|
|
|
|
|
|
|
||||
AmerisourceBergen Corporation (Non-GAAP)
|
|
|
|
|
|
|
||||
Adjusted gross profit
|
|
2.60%
|
|
2.65%
|
|
|
||||
Adjusted operating expenses
|
|
1.56%
|
|
1.61%
|
|
|
||||
Adjusted operating income
|
|
1.03%
|
|
1.04%
|
|
|
|
December 31,
|
|
September 30,
|
||||
|
2019
|
|
2019
|
||||
ASSETS
|
|
|
|
||||
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,232,604
|
|
|
$
|
3,374,194
|
|
Accounts receivable, net
|
12,568,816
|
|
|
12,386,879
|
|
||
Inventories
|
11,686,466
|
|
|
11,060,254
|
|
||
Right to recover asset
|
1,277,714
|
|
|
1,147,483
|
|
||
Prepaid expenses and other
|
189,216
|
|
|
163,244
|
|
||
Total current assets
|
28,954,816
|
|
|
28,132,054
|
|
||
|
|
|
|
||||
Property and equipment, net
|
1,442,383
|
|
|
1,770,516
|
|
||
Goodwill and other intangible assets
|
8,846,162
|
|
|
9,000,343
|
|
||
Other long-term assets
|
773,377
|
|
|
269,067
|
|
||
|
|
|
|
||||
Total assets
|
$
|
40,016,738
|
|
|
$
|
39,171,980
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
29,181,860
|
|
|
$
|
28,385,074
|
|
Other current liabilities
|
916,107
|
|
|
1,057,208
|
|
||
Short-term debt
|
532,489
|
|
|
139,012
|
|
||
Total current liabilities
|
30,630,456
|
|
|
29,581,294
|
|
||
|
|
|
|
||||
Long-term debt
|
3,636,114
|
|
|
4,033,880
|
|
||
|
|
|
|
||||
Accrued income taxes
|
289,047
|
|
|
284,075
|
|
||
Deferred income taxes
|
1,895,453
|
|
|
1,860,195
|
|
||
Other long-term liabilities
|
496,587
|
|
|
419,330
|
|
||
|
|
|
|
||||
Total equity
|
3,069,081
|
|
|
2,993,206
|
|
||
|
|
|
|
||||
Total liabilities and equity
|
$
|
40,016,738
|
|
|
$
|
39,171,980
|
|
|
Three Months Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating Activities:
|
|
|
|
||||
Net income
|
$
|
186,568
|
|
|
$
|
391,753
|
|
Adjustments to reconcile net income to net cash provided by operating activities 1
|
341,020
|
|
|
206,905
|
|
||
Changes in operating assets and liabilities, excluding the effects of acquisitions:
|
|
|
|
||||
Accounts receivable
|
(307,204
|
)
|
|
(658,890
|
)
|
||
Inventories
|
(630,980
|
)
|
|
(898,775
|
)
|
||
Accounts payable
|
787,037
|
|
|
1,498,643
|
|
||
Other
|
(233,631
|
)
|
|
(60,668
|
)
|
||
Net cash provided by operating activities
|
142,810
|
|
|
478,968
|
|
||
|
|
|
|
||||
Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(67,305
|
)
|
|
(79,233
|
)
|
||
Cost of acquired companies, net of cash acquired
|
—
|
|
|
(52,398
|
)
|
||
Other
|
4,966
|
|
|
4,013
|
|
||
Net cash used in investing activities
|
(62,339
|
)
|
|
(127,618
|
)
|
||
|
|
|
|
||||
Financing Activities:
|
|
|
|
||||
Net (repayments) borrowings
|
(13,981
|
)
|
|
8,442
|
|
||
Purchases of common stock 2
|
(135,128
|
)
|
|
(239,008
|
)
|
||
Exercises of stock options
|
20,113
|
|
|
22,400
|
|
||
Cash dividends on common stock
|
(83,088
|
)
|
|
(85,535
|
)
|
||
Other
|
(9,977
|
)
|
|
(10,009
|
)
|
||
Net cash used in financing activities
|
(222,061
|
)
|
|
(303,710
|
)
|
||
|
|
|
|
||||
(Decrease) increase in cash and cash equivalents
|
(141,590
|
)
|
|
47,640
|
|
||
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
3,374,194
|
|
|
2,492,516
|
|
||
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
3,232,604
|
|
|
$
|
2,540,156
|
|
1
|
Includes a LIFO expense of $13.3 million and an impairment of long-lived assets of $138.0 million in the three months ended December 31, 2019. Includes a LIFO credit of $3.0 million in the three months ended December 31, 2018.
|
•
|
Adjusted gross profit and adjusted gross profit margin: Adjusted gross profit is a non-GAAP financial measure that excludes the gain from antitrust litigation settlements, LIFO expense (credit), certain PharMEDium remediation costs, and the (credit) related to the New York State Opioid Stewardship Act. Gain from antitrust litigation settlements and LIFO expense (credit) are excluded because the Company cannot control the amounts recognized or timing of these items. PharMEDium remediation costs are excluded because they are unpredictable expenses. The (credit) related to the New York State Opioid Stewardship Act is excluded because it is unusual, non-recurring and non-cash. Adjusted gross profit margin is the ratio of adjusted gross profit to total revenue. Management believes that these non-GAAP financial measures are useful to investors as a supplemental measure of the Company’s ongoing operating performance. The gain from antitrust litigation settlements relates to the settlement of lawsuits that have been filed against brand pharmaceutical manufacturers alleging that the manufacturer, by itself or in concert with others, took improper actions to delay or prevent generic drugs from entering the market. The PharMEDium remediation costs relate to costs incurred in connection with suspended production activities following U.S. Food and Drug Administration inspections. LIFO expense (credit) is affected by changes in inventory quantities, product mix, and manufacturer pricing practices, which may be impacted by market and other external influences. The New York State Opioid Stewardship Act, which went into effect on July 1, 2018, established an annual $100 million fund and requires manufacturers, distributors, and importers to ratably share the assessment based upon opioids sold or distributed to or within New York state. In December 2018, the New York State Opioid Stewardship Act was ruled unconstitutional by the U.S. District Court for the Southern District of New York.
|
•
|
Adjusted operating expenses and adjusted operating expense margin: Adjusted operating expenses is a non-GAAP financial measure that excludes acquisition-related intangibles amortization, employee severance, litigation, and other, certain PharMEDium remediation costs, and impairment of long-lived assets. Adjusted operating expense margin is the ratio of adjusted operating expenses to total revenue. Acquisition-related intangibles amortization is excluded because it is a non-cash item and does not reflect the operating performance of the acquired companies. We exclude employee severance amounts that relate to unpredictable and/or non-recurring business restructuring. We exclude the amount of litigation settlements and other expenses, as well as PharMEDium remediation costs and the impairment of long-lived assets, that are unusual, non-operating, unpredictable, non-recurring or non-cash in nature because we believe these exclusions facilitate the analysis of our ongoing operational performance.
|
•
|
Adjusted operating income and adjusted operating income margin: Adjusted operating income is a non-GAAP financial measure that excludes the same items that are described above and excluded from adjusted gross profit and adjusted operating expenses. Adjusted operating income margin is the ratio of adjusted operating income to total revenue. Management believes that these non-GAAP financial measures are useful to investors as a supplemental way to evaluate the Company’s performance because the adjustments are unusual, non-operating, unpredictable, non-recurring or non-cash in nature.
|
•
|
Adjusted income before income taxes: Adjusted income before income taxes is a non-GAAP financial measure that excludes the same items that are described above and excluded from adjusted operating income. Management believes that this non-GAAP financial measure is useful to investors because it facilitates the calculation of the Company’s adjusted effective tax rate.
|
•
|
Adjusted effective tax rate: Adjusted effective tax rate is a non-GAAP financial measure that is determined by dividing adjusted income tax expense/benefit by adjusted income before income taxes. Management believes that this non-GAAP financial measure is useful to investors because it presents an effective tax rate that does not reflect unusual, non-operating, unpredictable, non-recurring, or non-cash amounts or items that are outside the control of the Company.
|
•
|
Adjusted income tax expense: Adjusted income tax expense is a non-GAAP financial measure that excludes the income tax expense associated with the same items that are described above and excluded from adjusted income before income taxes. In addition, the final U.S. tax reform measurement period adjustment to the one-time transition tax liability on historical foreign earnings and profits through December 31, 2017 ("Tax Reform") is excluded from adjusted income tax expense for the three months ended December 31, 2018. Management believes that this non-GAAP financial measure is useful to investors as a supplemental way to evaluate the Company’s performance because the adjustments are unusual, non-operating, unpredictable, non-recurring or non-cash in nature.
|
•
|
Adjusted net loss attributable to noncontrolling interest: Adjusted net loss attributable to noncontrolling interest excludes the non-controlling interest portion of acquisition-related intangibles amortization. Management believes that this non-GAAP financial measure is useful to investors because it facilitates the calculation of adjusted net income attributable to ABC.
|
•
|
Adjusted net income attributable to ABC: Adjusted net income attributable to ABC is a non-GAAP financial measure that excludes the same items that are described above. Management believes that this non-GAAP financial measure is useful to investors as a supplemental way to evaluate the Company's performance because the adjustments are unusual, non-operating, unpredictable, non-recurring or non-cash in nature.
|
•
|
Adjusted diluted earnings per share: Adjusted diluted earnings per share excludes the per share impact of adjustments including gain from antitrust litigation settlements; LIFO expense (credit); PharMEDium remediation costs; the (credit) related to the New York State Opioid Stewardship Act; acquisition-related intangibles amortization; employee severance, litigation, and other; and impairment of long-lived assets; in each case net of the tax effect calculated using the applicable effective tax rate for those items. In addition, the per share impact of Tax Reform is excluded from adjusted diluted earnings per share for the three months ended December 31, 2018. Management believes that this non-GAAP financial measure is useful to investors because it eliminates the per share impact of the items that are outside the control of the Company or that we consider to not be indicative of our ongoing operating performance due to their inherent unusual, non-operating, unpredictable, non-recurring, or non-cash nature.
|