AmerisourceBergen Reports Fiscal 2018 Fourth Quarter and Year End Results
Business Wire 6-Nov-2018 6:30 AM
Revenues of $43.3 Billion for the Fourth Quarter, a 10.7 Percent
Increase Year-Over-Year
Fourth Quarter GAAP Diluted EPS of $1.07 and Adjusted Diluted EPS of
$1.45
Revenues of $167.9 Billion for Fiscal Year 2018, a 9.7% Increase
Year-Over-Year
Fiscal Year 2018 GAAP Diluted EPS of $7.53 and Adjusted Diluted EPS
of $6.49
The Board of Directors Authorized a New $1.0 Billion Share Repurchase
Program
The Board of Directors Increased the Quarterly Dividend Rate by 5% to
$0.40 per share
AmerisourceBergen Corporation (NYSE:ABC) today reported that in its
fiscal year 2018 fourth quarter ended September 30, 2018, revenue
increased 10.7 percent to $43.3 billion. Revenue increased 9.7 percent
to $167.9 billion for the fiscal year. On the basis of U.S. generally
accepted accounting principles (GAAP), diluted earnings per share (EPS)
was $1.07 for the September quarter of fiscal 2018, compared to a loss
of $1.58 in the prior year quarter. GAAP diluted EPS for the fiscal year
was $7.53, compared to $1.64 in the prior year. Adjusted diluted EPS,
which is a non-GAAP measure that excludes items described below,
increased 9.0 percent to $1.45 in the fiscal year 2018 fourth quarter.
For fiscal year 2018, adjusted diluted EPS increased 10.4 percent to
$6.49.
"In fiscal year 2018, AmerisourceBergen delivered solid performance even
as two of our business units work through some challenges. We had a
fantastic year of growth in specialty distribution, successfully
integrated H. D. Smith, seamlessly onboarded the Rite Aid stores
acquired by Walgreens and continued to deepen relationships with our
customers throughout the company. Our innovative services and solutions
provide our partners with access to a state-of-the-art distribution
network and best-in-class customer experience offerings, enabling
manufacturers and providers to operate more effectively and
efficiently," said Steven H. Collis, Chairman, President and Chief
Executive Officer of AmerisourceBergen.
Today, the Company's Board of Directors declared a quarterly dividend of
$0.40 per common share, a 5% increase in its quarterly dividend
rate from $0.38 per common share. The quarterly dividend of $0.40 per
common share will be payable December 3, 2018, to stockholders of record
at the close of business on November 19, 2018.
"Our Board of Directors authorized a new $1.0 billion share repurchase
program and a 5% increase in our dividend as part of our ongoing
commitment to return capital to shareholders," said Mr. Collis.
"We are pleased with the ability of our associates to collaborate,
innovate and execute, enabling AmerisourceBergen to deliver long-term
value. Our outlook for fiscal 2019 reflects the strength of our business
despite ongoing challenges at PharMEDium," Mr. Collis continued. "Our
differentiated strategy, long-term partnerships, leadership in specialty
distribution and services, innovative services and solutions and strong
financial stewardship, position AmerisourceBergen to continue to build
long-term sustainable growth and deliver on our purpose of being united
in our responsibility to create healthier futures."
Fourth Quarter Fiscal Year 2018 Summary Results
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|
|
|
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GAAP
|
|
Adjusted (Non-GAAP)
|
|
Revenue
|
|
$43.3B
|
|
$43.3B
|
|
Gross Profit
|
|
$1.0B
|
|
$1.2B
|
|
Operating Expenses
|
|
$879M
|
|
$732M
|
|
Operating Income
|
|
$154M
|
|
$432M
|
|
Interest Expense, Net
|
|
$43M
|
|
$43M
|
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Tax Rate
|
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(73.4)%
|
|
19.6%
|
|
Net Income Attributable to ABC
|
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$233M
|
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$315M
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Diluted Shares Outstanding
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217M
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217M
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Diluted Earnings Per Share
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$1.07
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$1.45
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Below, AmerisourceBergen presents descriptive summaries of the Company's
GAAP quarterly results as well as its 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 our fiscal year 2019 expectations, please
refer to the Supplemental Information Regarding Non-GAAP Financial
Measures following the tables.
Fourth Quarter GAAP Quarterly Results
-
Revenue: In the fourth quarter of fiscal
2018, revenue was $43.3 billion, up 10.7 percent compared to the same
quarter in the previous fiscal year, reflecting a 10.8 percent
increase in Pharmaceutical Distribution Services revenue and a 7.9
percent increase in revenue within Other.
-
Gross Profit: Gross profit in the fiscal
2018 fourth quarter was $1.0 billion, an 11.9 percent decrease over
the same period in the previous fiscal year due to higher LIFO expense
in comparison to the prior fiscal year, PharMEDium remediation costs,
and an estimated assessment relating to the New York State Opioid
Stewardship Act. These increases in cost of goods sold were partially
offset by a 7.1 percent increase in Pharmaceutical Distribution
Services gross profit and a 3.5 percent increase in gross profit
within Other. Gross profit as a percentage of revenue was 2.39
percent, a decrease of 61 basis points from the prior year quarter.
-
Operating Expenses: In the fourth quarter
of fiscal 2018, operating expenses were $879 million, compared to
$1,307 million in the same period last fiscal year. The decline in
operating expenses was primarily due to the litigation settlement
accrual of $625 million recorded in the prior year quarter and was
partially offset by an increase in operating expenses within
Pharmaceutical Distribution Services primarily due to the January 2018
acquisition of H. D. Smith, the January 2018 consolidation of Profarma
and a goodwill impairment charge related to Profarma.
-
Operating Income / (Loss): In the fiscal
2018 fourth quarter, operating income was $154 million versus a loss
of $135 million in the prior year period. The increase in operating
income was primarily driven by the large decrease in operating
expenses, as explained above.
-
Interest Expense, Net: In the
fiscal 2018 fourth quarter, net interest expense of $43 million was up
21.9 percent versus the prior year quarter primarily due to the debt
issued to finance the H. D. Smith acquisition and the consolidation of
Profarma's debt and related interest expense.
-
Tax Rate: The current year's effective
tax rate was favorably impacted by the determination that a portion of
a significant prior year legal settlement accrual was deductible. The
prior year's effective tax rate was unfavorably impacted by
non-deductible legal settlement charges.
-
Diluted Earnings Per Share: Diluted
earnings per share was $1.07 in the fourth quarter of fiscal year 2018
compared to a loss of $1.58 in the previous fiscal year's fourth
quarter. This increase was largely driven by an increase in operating
income and a decrease in income tax expense.
-
Diluted Shares Outstanding: Diluted
weighted average shares outstanding for the fourth quarter of fiscal
year 2018 were 217.5 million, a 0.5 percent decline versus the prior
fiscal year fourth quarter.
Definition of Adjusted (Non-GAAP) Results
The comments below compare adjusted results, which exclude:
-
Gain from antitrust litigation settlements;
-
LIFO expense / credit;
-
PharMEDium remediation costs;
-
New York State Opioid Stewardship Act;
-
Goodwill impairment;
-
Acquisition-related intangibles amortization;
-
Employee severance, litigation, and other;
-
Loss on consolidation of equity investments;
-
Impairment of non-customer note receivable;
-
Loss on early retirement of debt; and a
-
One-time tax reform adjustment.
In addition, we previously issued $600 million of 1.15 percent senior
notes that were repaid in May 2017 to fund our initial special share
repurchase program to mitigate the dilutive effect of the Warrants. The
interest expense incurred relating to this borrowing has been excluded
from the Non-GAAP presentation.
Fourth Quarter Adjusted (Non-GAAP) Results
-
Revenue: In the fourth quarter of fiscal
2018, revenue was $43.3 billion, up 10.7 percent compared to the same
quarter in the previous fiscal year, reflecting a 10.8 percent
increase in Pharmaceutical Distribution Services revenue and a 7.9
percent increase in revenue within Other.
-
Adjusted Gross Profit: Gross profit in
the fiscal 2018 fourth quarter was $1.2 billion, which was up 6.2
percent when compared to the same period in the previous year due to
an increase in gross profit in Pharmaceutical Distribution Services,
which benefited from the acquisition of H. D. Smith and the
consolidation of Profarma, both in January 2018, and was partially
offset by lower contribution from PharMEDium. Gross profit as a
percentage of revenue was 2.69 percent, down 11 basis points when
compared to the prior year quarter.
-
Adjusted Operating Expenses: In the
fourth quarter of fiscal 2018, operating expenses were $732 million,
an increase of 17.0 percent compared to the same period in the last
fiscal year, primarily due to consolidation of Profarma and the
specialty joint venture in Brazil in January 2018 and the acquisition
of H. D. Smith in January 2018. Operating expenses as a percentage of
revenue in the fiscal 2018 fourth quarter were 1.69 percent, compared
to 1.60 percent for the same period in the previous fiscal year.
-
Adjusted Operating Income: In the fiscal
2018 fourth quarter, operating income of $432 million decreased 8.2
percent from the prior year period. Operating income as a percentage
of revenue decreased 20 basis points to 1.00 percent in the fiscal
2018 fourth quarter compared to the previous fiscal year's fourth
quarter.
-
Adjusted Interest Expense, Net: In
the fiscal 2018 fourth quarter, net interest expense of $43 million
was up 21.9 percent from the prior year quarter primarily due to the
debt issued to finance the H. D. Smith acquisition and the
consolidation of Profarma's debt and related interest expense.
-
Adjusted Tax Rate: The effective tax rate
for the fourth quarter of fiscal 2018 was 19.6 percent, down from 32.5
percent in the previous fiscal year's fourth quarter, primarily driven
by a reduction in the U.S. federal income tax rate from 35% to 21%.
-
Adjusted Diluted Earnings Per Share:
Diluted earnings per share was up 9.0 percent to $1.45 in the fourth
quarter of fiscal year 2018 compared to $1.33 in the previous fiscal
year's fourth quarter, driven primarily by the benefits of tax reform.
-
Adjusted Diluted Shares Outstanding:
Diluted weighted average shares outstanding for the fourth quarter of
fiscal year 2018 were 217.5 million, compared to 221.3 million in the
prior fiscal year fourth quarter due to share repurchases, net of
stock option exercises.
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 10.8 percent compared to the same quarter in the prior
fiscal year, primarily due to growth of some of its largest customers,
overall market growth, and especially strong oncology product sales. In
addition, revenue increased in the current quarter due to the January
2018 acquisition of H. D. Smith and the January 2018 consolidation of
Profarma. Segment operating income of $357 million in the September
quarter of fiscal 2018 was down 10.7 percent compared to the same period
in the previous fiscal year, primarily due to lower sales at PharMEDium.
Other
Revenue in Other was $1.6 billion in the fourth quarter of fiscal 2018,
an increase of 7.9 percent compared to the same period in the prior
fiscal year, primarily due to the consolidation of the specialty joint
venture in Brazil and ABCS's growth in its Canadian operations.
Operating income in Other increased 5.2 percent to $75 million in the
fourth quarter of fiscal 2018, primarily due to increased contributions
from MWI, World Courier and ABCS's Xcenda, and was partially offset by a
lower contribution from ABCS's Lash Group.
Fiscal Year 2018 Summary Results
|
|
|
|
|
|
|
|
|
GAAP
|
|
Adjusted (Non-GAAP)
|
|
Revenue
|
|
$167.9B
|
|
$167.9B
|
|
Gross Profit
|
|
$4.6B
|
|
$4.7B
|
|
Operating Expenses
|
|
$3.2B
|
|
$2.7B
|
|
Operating Income
|
|
$1.4B
|
|
$2.0B
|
|
Interest Expense, Net
|
|
$175M
|
|
$175M
|
|
Tax Rate
|
|
(37.2)%
|
|
21.3%
|
|
Net Income Attributable to ABC
|
|
$1.7B
|
|
$1.4B
|
|
Diluted Shares Outstanding
|
|
220M
|
|
220M
|
|
Diluted Earnings Per Share
|
|
$7.53
|
|
$6.49
|
|
|
|
|
|
|
Summary Fiscal Year GAAP Results
In fiscal year 2018, GAAP diluted EPS was $7.53, compared to $1.64 in
the prior year. Revenue of $167.9 billion was up 9.7 percent over the
last fiscal year. Gross profit increased 1.5 percent to $4.6 billion
primarily due to increases in Pharmaceutical Distribution Services and
Other, and was partially offset by an increase in LIFO expense.
Operating expenses decreased 9.1 percent over the last fiscal year
primarily due to the decrease in litigation settlements and accruals.
Operating income increased 36.2 percent and operating income margin
increased 17 basis points in the current fiscal year. Diluted weighted
average shares outstanding in fiscal 2018 were 220.3 million, down 0.6
percent from the prior fiscal year.
Summary Fiscal Year Adjusted (Non-GAAP) Results
In fiscal year 2018, adjusted diluted EPS was $6.49, an increase of 10.4
percent over the prior fiscal year primarily due to a lower adjusted
effective tax rate. Adjusted diluted weighted average shares outstanding
in fiscal 2018 were 220.3 million, down 0.6 percent from the prior
fiscal year. Revenue increased 9.7 percent from last fiscal year to
$167.9 billion. Adjusted gross profit increased by $340 million, or 7.8
percent, from last fiscal year to $4.7 billion primarily due to the
increase in revenue, the January 2018 consolidation of Profarma and the
specialty joint venture in Brazil, and the January 2018 acquisition of
H. D. Smith, offset in part by a lower contribution from PharMEDium.
Adjusted operating income decreased 1.8 percent as the increase in
adjusted operating expenses of $376 million exceeded the increase in
adjusted gross profit. Adjusted operating income margin decreased 14
basis points from 1.32 percent to 1.18 percent.
Recent Company Highlights & Milestones
-
Awarded the 2018 "Champion of Board Diversity" award by The Forum of
Executive Women's Philadelphia chapter. This award recognizes
AmerisourceBergen for its gender diversity on our Corporate Board of
Directors and leading the way for public companies in the state of
Pennsylvania.
-
Good Neighbor Pharmacy, AmerisourceBergen's independent pharmacy
network, received the #1 "Highest in Customer Satisfaction" ranking
among brick-and-mortar chain drug stores in the 2018 J.D. Power U.S.
Pharmacy survey. This marks the seventh time that Good Neighbor
Pharmacy has earned this achievement in the last nine years.
-
The AmerisourceBergen Foundation provided a grant to support the
Health Care Improvement Foundation's (HCIF) launch of a two-year pilot
program that aims to help prevent chronic opioid use among
post-surgical patients. The program will address the issue through
patient education and engagement, as well as provider improvement
strategies.
-
Recorded the 19th consecutive quarter with 10 percent or greater
revenue growth in Specialty distribution.
-
ICS, AmerisourceBergen's third-party logistics provider for
pharmaceutical manufacturers, opened its new flagship distribution
center in Columbus, Ohio.
-
US Bioservices, AmerisourceBergen's independent specialty pharmacy,
earned the Joint Commission's Gold Seal of Approval for Home Care
Accreditation by demonstrating continuous compliance with its
performance standards.
-
Hosted ThinkLive, AmerisourceBergen's annual global pharmaceutical
manufacturer summit, convening hundreds of manufacturers with the
Company's distribution and commercialization experts to share insights
for expanding patient access and driving product success.
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 introduced its fiscal year 2019 financial guidance
which reflects strong growth in Global Commercialization Services and
Animal Health and growth in Pharmaceutical Distribution Services, even
with continued production limitations at PharMEDium. The Company's range
of expectations incorporates three scenarios for PharMEDium production,
including a potential sizable headwind from the business unit in fiscal
year 2019. Please note that guidance includes the consolidation of
Profarma and the Specialty Joint Venture in Brazil. The Company expects:
-
Revenue growth in the mid-single digit percent range; and
-
Adjusted diluted earnings per share to be in the range of $6.65 to
$6.95.
Additional assumptions include:
-
Adjusted operating expenses to increase in the mid-single digit
percent range;
-
Adjusted operating income growth in the low- to mid-single digit
percent range;
-
Pharmaceutical Distribution Services segment operating income
growth in the low- to mid-single digit percent range;
-
Other, which is comprised of businesses focused on Global
Commercialization Services and Animal Health, operating income
growth in the high-single digit percent range;
-
Adjusted effective tax rate between 21 percent and 22 percent;
-
Adjusted free cash flow to be approximately $1.4 billion to $1.6
billion;
-
Capital expenditures in the $300 million range; and
-
Weighted average diluted shares are expected to be approximately 216
million for the year.
Conference Call & Slide Presentation
The Company will host a conference call to discuss the results at 8:30
a.m. ET on November 6, 2018. A slide presentation for investors has also
been posted on the Investors page of the AmerisourceBergen website at investor.amerisourcebergen.com.
Participating in the conference call will be:
-
Steven H. Collis, Chairman, President & Chief Executive Officer
-
Tim G. Guttman, Executive Vice President & Chief Financial Officer
-
James F. Cleary, Jr., Executive Vice President & incoming Chief
Financial Officer
The dial-in number for the live call will be (612) 326-1011. 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 www.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 454961.
Upcoming Investor Events
AmerisourceBergen management will be attending the following investor
conferences in the coming months:
-
Evercore ISI HealthCONx Conference, November 27-29, Boston;
-
J.P. Morgan Healthcare Conference, January 7-11, San Francisco.
Please check the website for updates regarding the timing of the live
presentation webcasts, if any, and for replay information.
About AmerisourceBergen
AmerisourceBergen provides pharmaceutical products, value-driving
services and business solutions that improve access to care. Tens of
thousands of healthcare providers, veterinary practices and livestock
producers trust us as their partner in the pharmaceutical supply chain.
Global manufacturers depend on us for services that drive commercial
success for their products. Through our daily work—and powered by our
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 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: 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 action 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 and 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 with respect to foreign operations), 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 effects of disruption
from the transactions on the respective businesses of the Company and H.
D. Smith and the fact that the transactions may make it more difficult
to establish or maintain relationships with employees, suppliers,
customers and other business partners; 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, 2017 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
|
|
FINANCIAL SUMMARY
|
|
(in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three MonthsEndedSeptember 30,2018
|
|
% ofRevenue
|
|
Three MonthsEndedSeptember 30,2017
|
|
% ofRevenue
|
|
%Change
|
|
Revenue
|
|
$
|
43,297,136
|
|
|
|
|
$
|
39,120,015
|
|
|
|
|
10.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
42,264,495
|
|
|
|
|
37,947,995
|
|
|
|
|
11.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit 1
|
|
1,032,641
|
|
|
2.39%
|
|
1,172,020
|
|
|
3.00%
|
|
(11.9)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling, and administrative
|
|
657,805
|
|
|
1.52%
|
|
560,877
|
|
|
1.43%
|
|
17.3%
|
|
Depreciation and amortization
|
|
120,558
|
|
|
0.28%
|
|
104,335
|
|
|
0.27%
|
|
15.5%
|
|
Goodwill impairment charge 2
|
|
59,684
|
|
|
|
|
—
|
|
|
|
|
|
|
Employee severance, litigation, and other 3
|
|
40,497
|
|
|
|
|
641,810
|
|
|
|
|
|
|
Total operating expenses
|
|
878,544
|
|
|
2.03%
|
|
1,307,022
|
|
|
3.34%
|
|
(32.8)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
154,097
|
|
|
0.36%
|
|
(135,002
|
)
|
|
(0.35)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) loss
|
|
(820
|
)
|
|
|
|
1,228
|
|
|
|
|
|
|
Interest expense, net
|
|
43,047
|
|
|
|
|
35,311
|
|
|
|
|
21.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before taxes
|
|
111,870
|
|
|
0.26%
|
|
(171,541
|
)
|
|
(0.44)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) expense
|
|
(82,134
|
)
|
|
|
|
173,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
194,004
|
|
|
0.45%
|
|
(344,587
|
)
|
|
(0.88)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interest
|
|
39,284
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to AmerisourceBergen Corporation
|
|
$
|
233,288
|
|
|
0.54%
|
|
$
|
(344,587
|
)
|
|
(0.88)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.08
|
|
|
|
|
$
|
(1.58
|
)
|
|
|
|
|
|
Diluted
|
|
$
|
1.07
|
|
|
|
|
$
|
(1.58
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
215,430
|
|
|
|
|
218,501
|
|
|
|
|
(1.4)%
|
|
Diluted
|
|
217,492
|
|
|
|
|
218,501
|
|
|
|
|
(0.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________________________
|
|
|
|
|
|
1
|
|
Includes an $83.5 million LIFO expense, $26.6 million of PharMEDium
remediation costs, and an estimated $22.0 million assessment
relating to the New York State Opioid Stewardship Act (for the
period covering January 1, 2017 through September 30, 2018) in the
three months ended September 30, 2018. Includes a $74.9 million LIFO
credit in the three months ended September 30, 2017.
|
|
|
|
|
|
2
|
|
The goodwill impairment charge is related to the Company's
non-wholly owned subsidiary in Brazil.
|
|
|
|
|
|
3
|
|
Includes $3.5 million of employee severance, $12.1 million of
litigation costs primarily related to opioid lawsuits and
investigations, and $25.0 million of acquisition-related deal and
integration costs, other costs related to business transformation
efforts, and other restructuring initiatives in the three months
ended September 30, 2018. Includes $7.5 million of employee
severance, $628.2 million of litigation settlements and accruals,
and $6.2 million of other costs related to business transformation
efforts, other restructuring initiatives, and acquisition-related
deal and integration costs in the three months ended September 30,
2017.
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
FINANCIAL SUMMARY
|
|
(in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year EndedSeptember 30,2018
|
|
% ofRevenue
|
|
Fiscal Year EndedSeptember 30,2017
|
|
% ofRevenue
|
|
%Change
|
|
Revenue
|
|
$
|
167,939,635
|
|
|
|
|
$
|
153,143,826
|
|
|
|
|
9.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
163,327,318
|
|
|
|
|
148,597,824
|
|
|
|
|
9.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit 1
|
|
4,612,317
|
|
|
2.75%
|
|
4,546,002
|
|
|
2.97%
|
|
1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling, and administrative
|
|
2,460,301
|
|
|
1.46%
|
|
2,128,730
|
|
|
1.39%
|
|
15.6%
|
|
Depreciation and amortization
|
|
465,127
|
|
|
0.28%
|
|
397,603
|
|
|
0.26%
|
|
17.0%
|
|
Goodwill impairment charge 2
|
|
59,684
|
|
|
|
|
—
|
|
|
|
|
|
|
Employee severance, litigation, and other 3
|
|
183,520
|
|
|
|
|
959,327
|
|
|
|
|
|
|
Total operating expenses
|
|
3,168,632
|
|
|
1.89%
|
|
3,485,660
|
|
|
2.28%
|
|
(9.1)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
1,443,685
|
|
|
0.86%
|
|
1,060,342
|
|
|
0.69%
|
|
36.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loss (income) 4
|
|
25,469
|
|
|
|
|
(2,730
|
)
|
|
|
|
|
|
Interest expense, net
|
|
174,699
|
|
|
|
|
145,185
|
|
|
|
|
20.3%
|
|
Loss on consolidation of equity investments
|
|
42,328
|
|
|
|
|
—
|
|
|
|
|
|
|
Loss on early retirement of debt
|
|
23,766
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
1,177,423
|
|
|
0.70%
|
|
917,887
|
|
|
0.60%
|
|
28.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) expense
|
|
(438,469
|
)
|
|
|
|
553,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
1,615,892
|
|
|
0.96%
|
|
364,484
|
|
|
0.24%
|
|
343.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interest
|
|
42,513
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to AmerisourceBergen Corporation
|
|
$
|
1,658,405
|
|
|
0.99%
|
|
$
|
364,484
|
|
|
0.24%
|
|
355.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
7.61
|
|
|
|
|
$
|
1.67
|
|
|
|
|
355.7%
|
|
Diluted
|
|
$
|
7.53
|
|
|
|
|
$
|
1.64
|
|
|
|
|
359.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
217,872
|
|
|
|
|
218,375
|
|
|
|
|
(0.2)%
|
|
Diluted
|
|
220,336
|
|
|
|
|
221,602
|
|
|
|
|
(0.6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________________________
|
|
|
|
|
|
1
|
|
Includes a $35.9 million gain from antitrust litigation settlements,
$67.3 million LIFO expense, $61.1 million of PharMEDium remediation
costs, and an estimated $22.0 million assessment relating to the New
York State Stewardship Act (for the period covering January 1, 2017
through September 30, 2018) in the fiscal year ended September 30,
2018. Includes a $157.8 million LIFO credit and a $1.4 million gain
from antitrust litigation settlements in the fiscal year ended
September 30, 2017.
|
|
|
|
|
|
2
|
|
The goodwill impairment charge is related to the Company's
non-wholly owned subsidiary in Brazil.
|
|
|
|
|
|
3
|
|
Includes $36.7 million of employee severance, $61.5 million of
litigation costs primarily related to opioid lawsuits,
investigations, and related initiatives, and $85.3 million of
acquisition-related deal and integration costs, other costs related
to business transformation efforts, and other restructuring
initiatives in the fiscal year ended September 30, 2018. Includes
$7.8 million of employee severance, $917.6 million for litigation
settlements and accruals, and $34.0 million of other costs due to
acquisition-related deal and integration costs, other restructuring
initiatives, and business transformation efforts in the fiscal year
ended September 30, 2017.
|
|
|
|
|
|
4
|
|
Includes a $30.0 million impairment on a non-customer note
receivable in the fiscal year ended September 30, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
|
|
GAAP TO NON-GAAP RECONCILIATIONS
|
|
|
|
(in thousands, except per share data)
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2018
|
|
|
|
|
|
Gross Profit
|
|
OperatingExpenses
|
|
OperatingIncome
|
|
IncomeBeforeIncome Taxes
|
|
Income Tax(Benefit)Expense
|
|
Net LossAtrributable toNoncontrollingInterest
|
|
Net IncomeAttributable toABC
|
|
Diluted
Earnings Per
Share
|
|
|
|
GAAP
|
|
$1,032,641
|
|
|
$878,544
|
|
|
$
|
154,097
|
|
|
$
|
111,870
|
|
|
$
|
(82,134
|
)
|
|
$
|
39,284
|
|
|
$
|
233,288
|
|
|
$
|
1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(225
|
)
|
|
—
|
|
|
225
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO expense
|
|
83,466
|
|
|
—
|
|
|
83,466
|
|
|
83,466
|
|
|
23,124
|
|
|
—
|
|
|
60,342
|
|
|
0.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PharMEDium remediation costs
|
|
26,580
|
|
|
(1,617
|
)
|
|
28,197
|
|
|
28,197
|
|
|
8,083
|
|
|
—
|
|
|
20,114
|
|
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York State Opioid Stewardship Act
|
|
22,000
|
|
|
—
|
|
|
22,000
|
|
|
22,000
|
|
|
6,122
|
|
|
—
|
|
|
15,878
|
|
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment charge
|
|
—
|
|
|
(59,684
|
)
|
|
59,684
|
|
|
59,684
|
|
|
—
|
|
|
(36,945
|
)
|
|
22,739
|
|
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
—
|
|
|
(44,484
|
)
|
|
44,484
|
|
|
44,484
|
|
|
13,191
|
|
|
(775
|
)
|
|
30,518
|
|
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee severance, litigation, and other
|
|
—
|
|
|
(40,497
|
)
|
|
40,497
|
|
|
40,497
|
|
|
83,317
|
|
1
|
—
|
|
|
(42,820
|
)
|
|
(0.20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on early retirement of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
148
|
|
|
—
|
|
|
(148
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax reform 2
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|
(25,000
|
)
|
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
|
|
1,164,687
|
|
|
732,262
|
|
|
432,425
|
|
|
390,198
|
|
|
76,626
|
|
|
1,564
|
|
|
315,136
|
|
|
1.45
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less non-wholly owned subsidiaries
|
|
51,991
|
|
|
47,130
|
|
|
4,861
|
|
|
(1,926
|
)
|
|
—
|
|
|
1,564
|
|
|
(363
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP excluding non-wholly owned subsidiaries
|
|
$1,112,696
|
|
|
$685,132
|
|
|
$
|
427,564
|
|
|
$
|
392,124
|
|
|
$
|
76,626
|
|
|
$
|
—
|
|
|
$
|
315,499
|
|
|
$
|
1.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP % change vs. prior year quarter
|
|
6.2%
|
|
17.0%
|
|
(8.2)%
|
|
(10.2)%
|
|
(45.8)%
|
|
|
|
7.4%
|
|
9.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP, excluding non-wholly owned subsidiaries, % change
vs. prior year quarter
|
|
1.4%
|
|
9.4%
|
|
(9.2)%
|
|
(9.8)%
|
|
(45.8)%
|
|
|
|
7.5%
|
|
9.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of Revenue:
|
|
GAAP
|
|
AdjustedNon-GAAP
|
|
|
|
|
|
Gross profit
|
|
2.39%
|
|
2.69%
|
|
|
|
|
|
Operating expenses
|
|
2.03%
|
|
1.69%
|
|
|
|
|
|
Operating income
|
|
0.36%
|
|
1.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________________________
|
|
|
|
|
|
1
|
|
During the fourth quarter of fiscal 2018, we determined that a
significant portion of a fiscal 2017 legal settlement charge would
be tax deductible.
|
|
|
|
|
|
2
|
|
Includes a measurement period adjustment of the one-time transition
tax on historical foreign earnings and profits through December 31,
2017.
|
|
|
|
|
|
3
|
|
The sum of the components does not equal the total due to rounding.
|
|
|
|
|
|
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
GAAP TO NON-GAAP RECONCILIATIONS
|
|
(in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2017
|
|
|
|
|
|
Gross Profit
|
|
OperatingExpenses
|
|
Operating(Loss)Income
|
|
InterestExpense, Net
|
|
(Loss) IncomeBeforeIncome Taxes
|
|
Income TaxExpense
|
|
Net (Loss)Income
|
|
DilutedEarningsPer Share
|
|
|
|
GAAP
|
|
$
|
1,172,020
|
|
|
$
|
1,307,022
|
|
|
$
|
(135,002
|
)
|
|
$
|
35,311
|
|
|
$
|
(171,541
|
)
|
|
$
|
173,046
|
|
|
$
|
(344,587
|
)
|
|
$
|
(1.58
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants expense 1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
132
|
|
|
(132
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
35
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO credit
|
|
(74,863
|
)
|
|
—
|
|
|
(74,863
|
)
|
|
—
|
|
|
(74,863
|
)
|
|
(28,926
|
)
|
|
(45,937
|
)
|
|
(0.21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
—
|
|
|
(39,144
|
)
|
|
39,144
|
|
|
—
|
|
|
39,237
|
|
|
16,984
|
|
|
22,253
|
|
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee severance, litigation, and other 2
|
|
—
|
|
|
(641,810
|
)
|
|
641,810
|
|
|
—
|
|
|
641,810
|
|
|
(19,942
|
)
|
|
661,752
|
|
|
3.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
|
|
$
|
1,097,157
|
|
|
$
|
626,068
|
|
|
$
|
471,089
|
|
|
$
|
35,311
|
|
|
$
|
434,643
|
|
|
$
|
141,259
|
|
|
$
|
293,384
|
|
|
$
|
1.33
|
|
|
3
|
|
|
|
|
|
|
|
|
|
Percentages of Revenue:
|
|
GAAP
|
|
AdjustedNon-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
3.00%
|
|
2.80%
|
|
|
|
Operating expenses
|
|
3.34%
|
|
1.60%
|
|
|
|
Operating (loss) income
|
|
(0.35)%
|
|
1.20%
|
|
|
|
|
|
|
|
|
|
|
|
________________________________________
|
|
|
|
|
|
1
|
|
In connection with the fiscal 2014 special $650 million share
repurchase program, which was established to mitigate the dilutive
effect of the Warrants, the Company issued $600 million of 1.15%
senior notes that were repaid in May 2017. The interest expense
incurred relating to this borrowing has been excluded from the
non-GAAP presentation.
|
|
|
|
2
|
|
Includes a $625.0 million litigation accrual with no corresponding
tax benefit.
|
|
|
|
3
|
|
The sum of the components does not equal the total due to rounding.
|
|
|
|
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
GAAP TO NON-GAAP RECONCILIATIONS
|
|
(in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended September 30, 2018
|
|
|
|
Gross Profit
|
|
OperatingExpenses
|
|
OperatingIncome
|
|
IncomeBefore Income Taxes
|
|
Income Tax(Benefit) Expense
|
|
Net LossAttributable toNoncontrollingInterest
|
|
Net IncomeAttributable toABC
|
|
DilutedEarnings Per Share
|
|
GAAP
|
|
$
|
4,612,317
|
|
|
$
|
3,168,632
|
|
|
$
|
1,443,685
|
|
|
$
|
1,177,423
|
|
|
$
|
(438,469
|
)
|
|
$
|
42,513
|
|
|
$
|
1,658,405
|
|
|
$
|
7.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
(35,938
|
)
|
|
—
|
|
|
(35,938
|
)
|
|
(35,938
|
)
|
|
(10,000
|
)
|
|
—
|
|
|
(25,938
|
)
|
|
(0.12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO expense
|
|
67,324
|
|
|
—
|
|
|
67,324
|
|
|
67,324
|
|
|
18,733
|
|
|
—
|
|
|
48,591
|
|
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PharMEDium remediation costs
|
|
61,129
|
|
|
(5,075
|
)
|
|
66,204
|
|
|
66,204
|
|
|
18,421
|
|
|
—
|
|
|
47,783
|
|
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York State Opioid Stewardship Act
|
|
22,000
|
|
|
—
|
|
|
22,000
|
|
|
22,000
|
|
|
6,122
|
|
|
—
|
|
|
15,878
|
|
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment charge
|
|
—
|
|
|
(59,684
|
)
|
|
59,684
|
|
|
59,684
|
|
|
—
|
|
|
(36,945
|
)
|
|
22,739
|
|
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
—
|
|
|
(174,751
|
)
|
|
174,751
|
|
|
174,876
|
|
|
48,660
|
|
|
(1,846
|
)
|
|
124,370
|
|
|
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee severance, litigation, and other
|
|
—
|
|
|
(183,520
|
)
|
|
183,520
|
|
|
183,520
|
|
|
122,222
|
|
1
|
—
|
|
|
61,298
|
|
|
0.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on consolidation of equity investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,328
|
|
|
—
|
|
|
—
|
|
|
42,328
|
|
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of non-customer note receivable
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on early retirement of debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,766
|
|
|
6,613
|
|
|
—
|
|
|
17,153
|
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax reform 2
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
612,595
|
|
|
—
|
|
|
(612,595
|
)
|
|
(2.78
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
|
|
4,726,832
|
|
|
2,745,602
|
|
|
1,981,230
|
|
|
1,811,187
|
|
|
384,897
|
|
|
3,722
|
|
|
1,430,012
|
|
|
6.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less non-wholly owned subsidiaries
|
|
149,832
|
|
|
140,668
|
|
|
9,164
|
|
|
(4,680
|
)
|
|
—
|
|
|
3,722
|
|
|
(958
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP excluding non-wholly owned subsidiaries
|
|
$
|
4,577,000
|
|
|
$
|
2,604,934
|
|
|
$
|
1,972,066
|
|
|
$
|
1,815,867
|
|
|
$
|
384,897
|
|
|
$
|
—
|
|
|
$
|
1,430,970
|
|
|
$
|
6.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP % change vs. prior year
|
|
7.8%
|
|
15.9%
|
|
(1.8)%
|
|
(3.7)%
|
|
(33.2)%
|
|
|
|
9.7%
|
|
10.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP, excluding non-wholly owned subsidiaries, % change
vs. prior year
|
|
4.3%
|
|
9.9%
|
|
(2.2)%
|
|
(3.4)%
|
|
(33.2)%
|
|
|
|
9.8%
|
|
10.4%
|
|
|
|
|
|
|
|
|
|
Percentages of Revenue:
|
|
GAAP
|
|
AdjustedNon-GAAP
|
|
|
|
Gross profit
|
|
2.75%
|
|
2.81%
|
|
|
|
Operating expenses
|
|
1.89%
|
|
1.63%
|
|
|
|
Operating income
|
|
0.86%
|
|
1.18%
|
|
|
|
|
|
|
|
|
|
|
|
________________________________________
|
|
|
|
|
|
1
|
|
During the fourth quarter of fiscal 2018, we determined that a
significant portion of a fiscal 2017 legal settlement charge would
be tax deductible.
|
|
|
|
2
|
|
Includes the impact of applying a lower U.S. federal income tax rate
to the Company's net deferred tax liabilities as of December 31,
2017, offset in part by a one-time transition tax on historical
foreign earning and profits through December 31, 2017.
|
|
|
|
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
GAAP TO NON-GAAP RECONCILIATIONS
|
|
(in thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended September 30, 2017
|
|
|
|
Gross Profit
|
|
OperatingExpenses
|
|
OperatingIncome
|
|
InterestExpense, Net
|
|
IncomeBefore IncomeTaxes
|
|
Income TaxExpense
|
|
Net Income
|
|
DilutedEarnings PerShare
|
|
GAAP
|
|
$
|
4,546,002
|
|
|
$
|
3,485,660
|
|
|
$
|
1,060,342
|
|
|
$
|
145,185
|
|
|
$
|
917,887
|
|
|
$
|
553,403
|
|
|
$
|
364,484
|
|
|
$
|
1.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants expense 1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,358
|
)
|
|
5,358
|
|
|
1,924
|
|
|
3,434
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
(1,395
|
)
|
|
—
|
|
|
(1,395
|
)
|
|
—
|
|
|
(1,395
|
)
|
|
(501
|
)
|
|
(894
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO credit
|
|
(157,782
|
)
|
|
—
|
|
|
(157,782
|
)
|
|
—
|
|
|
(157,782
|
)
|
|
(56,661
|
)
|
|
(101,121
|
)
|
|
(0.46
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
—
|
|
|
(156,378
|
)
|
|
156,378
|
|
|
—
|
|
|
156,752
|
|
|
56,291
|
|
|
100,461
|
|
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee severance, litigation, and other 2
|
|
—
|
|
|
(959,327
|
)
|
|
959,327
|
|
|
—
|
|
|
959,327
|
|
|
21,934
|
|
|
937,393
|
|
|
4.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP
|
|
$
|
4,386,825
|
|
|
$
|
2,369,955
|
|
|
$
|
2,016,870
|
|
|
$
|
139,827
|
|
|
$
|
1,880,147
|
|
|
$
|
576,390
|
|
|
$
|
1,303,757
|
|
|
$
|
5.88
|
|
|
|
|
|
|
|
|
|
|
Percentages of Revenue:
|
|
GAAP
|
|
AdjustedNon-GAAP
|
|
|
|
Gross profit
|
|
2.97%
|
|
2.86%
|
|
|
|
Operating expenses
|
|
2.28%
|
|
1.55%
|
|
|
|
Operating income
|
|
0.69%
|
|
1.32%
|
|
|
|
|
|
|
|
|
|
|
|
________________________________________
|
|
|
|
|
|
1
|
|
In connection with the fiscal 2014 special $650 million share
repurchase program, which was established to mitigate the dilutive
effect of the Warrants, the Company issued $600 million of 1.15%
senior notes that were repaid in May 2017. The interest expense
incurred relating to this borrowing has been excluded from the
non-GAAP presentation.
|
|
|
|
2
|
|
Includes $914.4 million for litigation settlements and accruals with
no corresponding income tax benefit.
|
|
|
|
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
RECONCILIATION OF DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
(GAAP TO NON-GAAP)
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Fiscal Year Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Basic shares outstanding
|
|
215,430
|
|
|
218,501
|
|
|
217,872
|
|
|
218,375
|
|
|
|
|
|
|
|
|
|
|
|
Stock option, restricted stock, and restricted stock unit dilution
|
|
2,062
|
|
|
—
|
|
|
2,464
|
|
|
3,227
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted shares outstanding
|
|
217,492
|
|
|
218,501
|
|
|
220,336
|
|
|
221,602
|
|
|
|
|
|
|
|
|
|
|
|
Stock option, restricted stock, and restricted stock unit dilution 1
|
|
—
|
|
|
2,822
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted shares outstanding
|
|
217,492
|
|
|
221,323
|
|
|
220,336
|
|
|
221,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________________________
|
|
|
|
1
|
|
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.
|
|
|
|
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
AMERISOURCEBERGEN CORPORATION AND SUBSIDIARIES
|
|
GAAP SUPPLEMENTAL INFORMATION
|
|
(In thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2018
|
|
|
|
AmerisourceBergenCorporation andWholly
OwnedSubsidiaries
|
|
% Changevs. Prior YearQuarter
|
|
Non-Wholly OwnedSubsidiaries
|
|
NoncontrollingInterest
|
|
ConsolidatedAmerisourceBergenCorporation
|
|
% Changevs. Prior YearQuarter
|
|
Revenue
|
|
$
|
42,950,048
|
|
|
9.8
|
%
|
|
$
|
347,088
|
|
|
$
|
—
|
|
|
$
|
43,297,136
|
|
|
10.7
|
%
|
|
Gross profit
|
|
$
|
980,650
|
|
|
(16.3
|
)%
|
|
$
|
51,991
|
|
|
$
|
—
|
|
|
$
|
1,032,641
|
|
|
(11.9
|
)%
|
|
Operating expenses
|
|
$
|
770,334
|
|
|
(41.1
|
)%
|
|
$
|
108,210
|
|
|
$
|
—
|
|
|
$
|
878,544
|
|
|
(32.8
|
)%
|
|
Operating income (loss)
|
|
$
|
210,316
|
|
|
|
|
$
|
(56,219
|
)
|
|
$
|
—
|
|
|
$
|
154,097
|
|
|
|
|
Interest expense, net
|
|
$
|
39,839
|
|
|
12.8
|
%
|
|
$
|
3,208
|
|
|
$
|
—
|
|
|
$
|
43,047
|
|
|
21.9
|
%
|
|
Net income (loss)
|
|
$
|
256,898
|
|
|
|
|
$
|
(62,894
|
)
|
|
$
|
39,284
|
|
|
$
|
233,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended September 30, 2018
|
|
|
|
AmerisourceBergenCorporation andWholly
OwnedSubsidiaries
|
|
% Changevs. Prior Year
|
|
Non-Wholly OwnedSubsidiaries
|
|
NoncontrollingInterest
|
|
ConsolidatedAmerisourceBergenCorporation
|
|
% Changevs. Prior Year
|
|
Revenue
|
|
$
|
166,962,154
|
|
|
9.0
|
%
|
|
$
|
977,481
|
|
|
$
|
—
|
|
|
$
|
167,939,635
|
|
|
9.7
|
%
|
|
Gross profit
|
|
$
|
4,462,485
|
|
|
(1.8
|
)%
|
|
$
|
149,832
|
|
|
$
|
—
|
|
|
$
|
4,612,317
|
|
|
1.5
|
%
|
|
Operating expenses
|
|
$
|
2,964,144
|
|
|
(15.0
|
)%
|
|
$
|
204,488
|
|
|
$
|
—
|
|
|
$
|
3,168,632
|
|
|
(9.1
|
)%
|
|
Operating income (loss)
|
|
$
|
1,498,341
|
|
|
41.3
|
%
|
|
$
|
(54,656
|
)
|
|
$
|
—
|
|
|
$
|
1,443,685
|
|
|
36.2
|
%
|
|
Interest expense, net
|
|
$
|
162,109
|
|
|
11.7
|
%
|
|
$
|
12,590
|
|
|
$
|
—
|
|
|
$
|
174,699
|
|
|
20.3
|
%
|
|
Net income (loss)
|
|
$
|
1,683,323
|
|
|
361.8
|
%
|
|
$
|
(67,431
|
)
|
|
$
|
42,513
|
|
|
$
|
1,658,405
|
|
|
355.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
SUMMARY SEGMENT INFORMATION
|
|
(dollars in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Revenue
|
|
2018
|
|
2017
|
|
% Change
|
|
Pharmaceutical Distribution Services
|
|
$
|
41,726,426
|
|
|
$
|
37,654,651
|
|
|
10.8%
|
|
Other
|
|
1,596,178
|
|
|
1,479,987
|
|
|
7.9%
|
|
Intersegment eliminations
|
|
(25,468
|
)
|
|
(14,623
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
43,297,136
|
|
|
$
|
39,120,015
|
|
|
10.7%
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Operating income (loss)
|
|
2018
|
|
2017
|
|
% Change
|
|
Pharmaceutical Distribution Services
|
|
$
|
356,808
|
|
|
$
|
399,715
|
|
|
(10.7)%
|
|
Other
|
|
75,465
|
|
|
71,718
|
|
|
5.2%
|
|
Intersegment eliminations
|
|
152
|
|
|
(344
|
)
|
|
|
|
Total segment operating income
|
|
432,425
|
|
|
471,089
|
|
|
(8.2)%
|
|
|
|
|
|
|
|
|
|
PharMEDium remediation costs
|
|
(28,197
|
)
|
|
—
|
|
|
|
|
LIFO (expense) credit
|
|
(83,466
|
)
|
|
74,863
|
|
|
|
|
New York State Opioid Stewardship Act
|
|
(22,000
|
)
|
|
—
|
|
|
|
|
Goodwill impairment charge
|
|
(59,684
|
)
|
|
—
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
(44,484
|
)
|
|
(39,144
|
)
|
|
|
|
Employee severance, litigation, and other
|
|
(40,497
|
)
|
|
(641,810
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
$
|
154,097
|
|
|
$
|
(135,002
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical Distribution Services
|
|
|
|
|
|
|
|
Gross profit
|
|
2.06%
|
|
2.14%
|
|
|
|
Operating expenses
|
|
1.21%
|
|
1.07%
|
|
|
|
Operating income
|
|
0.86%
|
|
1.06%
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
Gross profit
|
|
19.02%
|
|
19.82%
|
|
|
|
Operating expenses
|
|
14.29%
|
|
14.97%
|
|
|
|
Operating income
|
|
4.73%
|
|
4.85%
|
|
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (GAAP)
|
|
|
|
|
|
|
|
Gross profit
|
|
2.39%
|
|
3.00%
|
|
|
|
Operating expenses
|
|
2.03%
|
|
3.34%
|
|
|
|
Operating income (loss)
|
|
0.36%
|
|
(0.35)%
|
|
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (Non-GAAP)
|
|
|
|
|
|
|
|
Adjusted gross profit
|
|
2.69%
|
|
2.80%
|
|
|
|
Adjusted operating expenses
|
|
1.69%
|
|
1.60%
|
|
|
|
Adjusted operating income
|
|
1.00%
|
|
1.20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
SUMMARY SEGMENT INFORMATION
|
|
(dollars in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
Fiscal year Ended September 30,
|
|
Revenue
|
|
2018
|
|
2017
|
|
% Change
|
|
Pharmaceutical Distribution Services
|
|
$
|
161,699,343
|
|
|
$
|
147,453,495
|
|
|
9.7%
|
|
Other
|
|
6,332,730
|
|
|
5,747,863
|
|
|
10.2%
|
|
Intersegment eliminations
|
|
(92,438
|
)
|
|
(57,532
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
167,939,635
|
|
|
$
|
153,143,826
|
|
|
9.7%
|
|
|
|
|
|
|
|
Fiscal Year Ended September 30,
|
|
Operating income
|
|
2018
|
|
2017
|
|
% Change
|
|
Pharmaceutical Distribution Services
|
|
$
|
1,626,748
|
|
|
$
|
1,643,629
|
|
|
(1.0)%
|
|
Other
|
|
355,091
|
|
|
373,797
|
|
|
(5.0)%
|
|
Intersegment eliminations
|
|
(609
|
)
|
|
(556
|
)
|
|
|
|
Total segment operating income
|
|
1,981,230
|
|
|
2,016,870
|
|
|
(1.8)%
|
|
|
|
|
|
|
|
|
|
Gain from antitrust litigation settlements
|
|
35,938
|
|
|
1,395
|
|
|
|
|
PharMEDium remediation costs
|
|
(66,204
|
)
|
|
—
|
|
|
|
|
LIFO (expense) credit
|
|
(67,324
|
)
|
|
157,782
|
|
|
|
|
New York State Opioid Stewardship Act
|
|
(22,000
|
)
|
|
—
|
|
|
|
|
Goodwill impairment charge
|
|
(59,684
|
)
|
|
—
|
|
|
|
|
Acquisition-related intangibles amortization
|
|
(174,751
|
)
|
|
(156,378
|
)
|
|
|
|
Employee severance, litigation, and other
|
|
(183,520
|
)
|
|
(959,327
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
1,443,685
|
|
|
$
|
1,060,342
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical Distribution Services
|
|
|
|
|
|
|
|
Gross profit
|
|
2.14%
|
|
2.16%
|
|
|
|
Operating expenses
|
|
1.14%
|
|
1.04%
|
|
|
|
Operating income
|
|
1.01%
|
|
1.11%
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
Gross profit
|
|
19.90%
|
|
20.96%
|
|
|
|
Operating expenses
|
|
14.30%
|
|
14.45%
|
|
|
|
Operating income
|
|
5.61%
|
|
6.50%
|
|
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (GAAP)
|
|
|
|
|
|
|
|
Gross profit
|
|
2.75%
|
|
2.97%
|
|
|
|
Operating expenses
|
|
1.89%
|
|
2.28%
|
|
|
|
Operating income
|
|
0.86%
|
|
0.69%
|
|
|
|
|
|
|
|
|
|
|
|
AmerisourceBergen Corporation (Non-GAAP)
|
|
|
|
|
|
|
|
Adjusted gross profit
|
|
2.81%
|
|
2.86%
|
|
|
|
Adjusted operating expenses
|
|
1.63%
|
|
1.55%
|
|
|
|
Adjusted operating income
|
|
1.18%
|
|
1.32%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: For more information related to non-GAAP financial measures,
refer to the section titled "Supplemental Information Regarding
Non-GAAP Financial Measures" of this release.
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
2018
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,492,516
|
|
|
$
|
2,435,115
|
|
Accounts receivable, net
|
|
11,314,226
|
|
|
10,303,324
|
|
Merchandise inventories
|
|
11,918,508
|
|
|
11,461,428
|
|
Prepaid expenses and other
|
|
169,122
|
|
|
103,432
|
|
Total current assets
|
|
25,894,372
|
|
|
24,303,299
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
1,892,424
|
|
|
1,797,945
|
|
Goodwill and other intangible assets
|
|
9,612,100
|
|
|
8,877,562
|
|
Other long-term assets
|
|
270,942
|
|
|
337,664
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
37,669,838
|
|
|
$
|
35,316,470
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
26,836,873
|
|
|
$
|
25,404,042
|
|
Other current liabilities
|
|
1,032,814
|
|
|
1,414,123
|
|
Total current liabilities
|
|
27,869,687
|
|
|
26,818,165
|
|
|
|
|
|
|
|
Long-term debt
|
|
4,158,532
|
|
|
3,429,934
|
|
|
|
|
|
|
|
Accrued income taxes
|
|
299,600
|
|
|
84,257
|
|
Deferred income taxes
|
|
1,829,410
|
|
|
2,492,612
|
|
Other long-term liabilities
|
|
462,648
|
|
|
427,041
|
|
|
|
|
|
|
|
Total equity
|
|
3,049,961
|
|
|
2,064,461
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
37,669,838
|
|
|
$
|
35,316,470
|
|
|
|
|
|
|
|
|
|
|
|
|
AMERISOURCEBERGEN CORPORATION
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
Fiscal Year Ended September 30,
|
|
|
|
2018
|
|
2017
|
|
Operating Activities:
|
|
|
|
|
|
Net income
|
|
$
|
1,615,892
|
|
|
$
|
364,484
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities 1,2
|
|
(33,787
|
)
|
|
672,502
|
|
|
Changes in operating assets and liabilities, excluding the effects
of acquisitions and divestitures:
|
|
|
|
|
|
Accounts receivable
|
|
(657,770
|
)
|
|
(1,277,896
|
)
|
|
Merchandise inventories
|
|
(4,923
|
)
|
|
(431,454
|
)
|
|
Accounts payable
|
|
859,036
|
|
|
1,473,389
|
|
|
Other 3
|
|
(367,060
|
)
|
|
703,113
|
|
|
Net cash provided by operating activities
|
|
1,411,388
|
|
|
1,504,138
|
|
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
|
Capital expenditures
|
|
(336,411
|
)
|
|
(466,397
|
)
|
|
Cost of acquired companies, net of cash acquired
|
|
(785,299
|
)
|
|
(61,648
|
)
|
|
Net proceeds from investment securities available-for-sale
|
|
—
|
|
|
26,143
|
|
|
Other
|
|
10,596
|
|
|
3,861
|
|
|
Net cash used in investing activities
|
|
(1,111,114
|
)
|
|
(498,041
|
)
|
|
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
|
Net borrowings (repayments) 4
|
|
635,695
|
|
|
(749,553
|
)
|
|
Purchases of common stock 5
|
|
(639,235
|
)
|
|
(329,929
|
)
|
|
Payment of premium on early retirement of debt
|
|
(22,348
|
)
|
|
—
|
|
|
Exercises of stock options
|
|
138,456
|
|
|
102,923
|
|
|
Cash dividends on common stock
|
|
(333,041
|
)
|
|
(320,270
|
)
|
|
Other
|
|
(22,400
|
)
|
|
(15,985
|
)
|
|
Net cash used in financing activities
|
|
(242,873
|
)
|
|
(1,312,814
|
)
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
57,401
|
|
|
(306,717
|
)
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of year
|
|
2,435,115
|
|
|
2,741,832
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
|
$
|
2,492,516
|
|
|
$
|
2,435,115
|
|
|
|
|
|
|
|
|
|
|
|
|
________________________________________
|
|
|
|
1
|
|
Includes a $67.3 million LIFO expense in the fiscal year ended
September 30, 2018. Includes a $157.8 million LIFO credit in the
fiscal year ended September 30, 2017.
|
|
|
|
|
|
2
|
|
Includes $826.9 million benefit for deferred income taxes for the
fiscal year ended September 30, 2018, primarily as a result of
applying a lower U.S. federal income tax rate to the Company's net
deferred tax liabilities as of December 31, 2017 in connection with
tax reform.
|
|
|
|
|
|
3
|
|
Includes a $241.3 million increase in income taxes payable for the
fiscal year ended September 30, 2018, primarily as a result of a
one-time transition tax on historical foreign earnings and profits
through December 31, 2017 in connection with tax reform. Includes a
$625.0 million litigation accrual in the fiscal year ended September
30, 2017, which was settled and paid in the fiscal year ended
September 30, 2018.
|
|
|
|
|
|
4
|
|
Net borrowing in the fiscal year ended September 30, 2018 were
primarily used to finance the acquisition of H.D. Smith, which was
completed in January 2018.
|
|
|
|
|
|
5
|
|
Additional purchases made in September 2018 totaling $24.0 million
cash settled in October 2018.
|
|
|
|
|
SUPPLEMENTAL INFORMATION REGARDINGNON-GAAP FINANCIAL
MEASURES
To supplement the financial measures prepared in accordance with U.S.
generally accepted accounting principles (GAAP), the Company uses the
non-GAAP financial measures described below. The non-GAAP financial
measures should be viewed in addition to, and not in lieu of, financial
measures calculated in accordance with GAAP. These supplemental measures
may vary from, and may not be comparable to, similarly titled measures
by other companies.
The non-GAAP financial measures are presented because management uses
non-GAAP financial measures to evaluate the Company's operating
performance, to perform financial planning, and to determine incentive
compensation. Therefore, the Company believes that the presentation of
non-GAAP financial measures provides useful supplementary information
to, and facilitates additional analysis by, investors. The presented
non-GAAP financial measures exclude items that management does not
believe reflect the Company's core operating performance because such
items are outside the control of the Company or are inherently unusual,
non-operating, unpredictable, non-recurring, or non-cash. We have
included the following non-GAAP earnings-related financial measures in
this release:
-
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, certain PharMEDium remediation
costs, LIFO expense (credit), and costs 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 and
non-recurring expenses. The New York State Opioid Stewardship Act
assessment (for the period covering January 1, 2017 through September
30, 2018) is excluded because it is not expected to be a normal,
recurring operating expenditure of the Company, as the Company's
distribution model has been revised to substantially eliminate the
expense in future periods. 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 class action 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.
-
Adjusted operating expenses and adjusted operating expense margin: Adjusted
operating expenses is a non-GAAP financial measure that excludes
acquisition-related intangibles amortization and impairments, employee
severance, litigation, and other, and certain PharMEDium remediation
costs. Adjusted operating expense margin is the ratio of adjusted
operating expenses to total revenue. The acquisition-related
intangibles amortization and impairments are excluded because they are
non-cash items and the amortization 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, 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 interest expense, net: Adjusted interest expense is a
non-GAAP financial measure that excludes the interest expense on our
$600 million of 1.15% senior notes that were repaid in May 2017 (the
"2017 Notes"). The 2017 Notes were issued to fund a special $650
million share repurchase program under which we purchased shares to
reduce the dilution related to the warrants that we issued in March
2013 to wholly-owned subsidiaries of Walgreens Boots Alliance, Inc.
Management believes that this non-GAAP financial measure is useful to
investors in evaluating the Company's ongoing interest expense, net.
-
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. In addition, the loss on consolidation of equity investments,
impairment on a non-customer note receivable, and the loss on the
early retirement of debt are also excluded from adjusted income before
income taxes. 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.
-
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 and excluded from adjusted income
before income taxes. In addition, the one-time impact of U.S. tax
reform ("Tax Reform") is excluded from adjusted net income
attributable to ABC. Tax Reform includes a benefit from applying a
lower U.S. federal income tax rate to the Company's net deferred tax
liabilities as of December 31, 2017, offset in part by a one-time
transition tax on historical foreign earnings and profits through
December 31, 2017. 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 income (loss) attributable to noncontrolling interest: Adjusted
net income attributable to noncontrolling interest excludes the
non-controlling interest portion of acquisition-related intangibles
amortization and impairment. 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 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; costs related to the New York State
Opioid Stewardship Act; acquisition-related intangibles amortization
and impairment; employee severance, litigation, and other; loss on
consolidation of equity investments; impairment of a non-customer note
receivable; the interest expense incurred in connection with the 2017
Notes; and the loss on early retirement of debt; 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. 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.
-
Each of the non-GAAP financial metrics discussed in this appendix has
been adjusted to exclude non-wholly owned subsidiaries. Management
believes that these further adjusted non-GAAP financial measures are
useful to investors to provide comparable information to historical
non-GAAP financial measures that do not reflect the consolidation of
non-wholly owned subsidiaries.
In addition, the Company has provided non-GAAP fiscal year 2019 guidance
for diluted earnings per share, operating expense, operating income, and
effective income tax rate that excludes the same or similar items as
those that are excluded from the historical non-GAAP financial measures,
as well as significant items that are outside the control of the Company
or inherently unusual, non-operating, unpredictable, non-recurring or
non-cash in nature. In addition, it has provided 2019 adjusted free cash
flow guidance. For fiscal year 2019, we have defined the non-GAAP
financial measure of adjusted free cash flow as net cash provided by
operating activities, excluding other significant unpredictable or
non-recurring cash payments or receipts relating to legal settlements,
minus capital expenditures. The Company does not provide forward looking
guidance on a GAAP basis for such metrics because certain financial
information, the probable significance of which cannot be determined, is
not available and cannot be reasonably estimated. For example, LIFO
expense (credit) is largely dependent upon the future inflation or
deflation of brand and generic pharmaceuticals, which is out of the
Company's control, and acquisition-related intangibles amortization
depends on the timing and amount of future acquisitions, which cannot be
reasonably estimated. Similarly, the timing and amount of litigation
settlements is unpredictable and non-recurring.
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