Amerisource Net Income Up 23% and Board Declares Two-for-one Stock Split.MALVERN Malvern, England: see Great Malvern. , Pa.--(BUSINESS WIRE)--Jan. 26, 1999-- Expanding Margins Drive Earnings Improvement AmeriSource Health Corp. (NYSE NYSE See: New York Stock Exchange : AAS) one of the nation's leading wholesale distributors of pharmaceuticals, Tuesday Tuesday: see week. reported substantially higher earnings for the first quarter of its fiscal year 1999. For the three months ended Dec. 31, 1998, net income increased 23% to $17.8 million versus $14.5 million for the same period last year. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of exceeded analysts' expectations at $.73, an increase of 22% from $.60 per share earned one year ago. These results mark a continuation continuation - continuation passing style of the Company's strong history of earnings per share growth of 20% or greater. Revenue for the quarter was $2.2 billion compared to $2.3 billion one year ago. The slight decrease of 4% reflected last year's termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of service contracts with two major warehousing chain customers and one large mail order customer whose purchases resulted in operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: below the Company's average. For the first quarter of fiscal 1999, gross margin as a percentage of operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. increased to 4.71% as compared to 4.68% for the same period one year ago. This increase reflects changes in customer mix. The Company's operating margin expanded in the first quarter to 1.71% of operating revenue versus 1.61% a year ago. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were 3.00% of operating revenue compared to 3.07% for the same period last year. Reflecting continued disciplined capital usage, the Company's interest expense showed a significant decrease of 36% to $8.1 million as compared to $12.7 million for the same quarter last year. The Company's return on committed capital remained strong at 25.3%, again exceeding stated goals of 20% or greater. R. David Yost David Harold Yost (born January 7, 1969) is an American actor known for his role on the television series Mighty Morphin Power Rangers. Biography Early life , AmeriSource President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. said, "The significant and recent awards of the Veterans Affairs Veterans Affairs is a term of the business that deals with the relation between a government and its veteran communities, usually administered by the designated government agency. and Premier contracts is strong evidence that our core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
Reflecting the strong confidence in the Company's future prospects, AmeriSource's Board of Directors today approved a two-for-one stock split, subject to shareholders authorizing additional shares. Shareholders will receive one additional share for each share held on the anticipated record date of March 3, 1999. As of Dec. 31, 1998, AmeriSource had approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 24.4 million diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares outstanding and that number will increase to approximately 48.8 million. Shares resulting from the split will be distributed by the Company's transfer agent, Chase Mellon Securities. R. David Yost added, "Since our public offering nearly four years ago, our stock value has increased at a compounded annual growth rate of 42%. This decision affirms the Company's strong fundamental outlook. Historically, AmeriSource's stock has been thinly traded Thinly traded Infrequently traded. , and this action will provide an opportunity for us to reach a broader investor base and will help to improve the overall liquidity of our stock." In addition, after the close of the market today, AmeriSource filed a registration statement with the Securities and Exchange Commission (SEC) covering the sale of six million shares of common stock held by Citicorp Venture Capital, Ltd. (CVC See CSC. ). After the intended sale of such shares, CVC would own approximately 720,000 shares of AmeriSource common stock. No shares of common stock will be sold by the company in the offering. Assuming no review by the SEC, the Company expects to complete the offering by mid-February n. 1. the middle part of February. Noun 1. mid-February - the middle part of February period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue . Commenting on these developments, Yost said, "We expect that our recently announced management changes in combination with our recent contract wins and our announced actions to broaden our shareholder base, will serve to strengthen AmeriSource's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth prospects and further maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. shareholder value. We expect to continue our history of strong earnings growth through strengthened operating performance in a very attractive industry." AmeriSource Health Corp. is a Fortune 200 company with revenue of $8.7 billion for fiscal year 1998. The Company, one of the nation's leading pharmaceutical distributors, serves customers nationwide from a network of 23 strategically-located distribution centers. News and additional information about AmeriSource are available at www.AmeriSource.com Attachments: AmeriSource Health Corp. Financial Summary AmeriSource Health Corp. Consolidated Balance Sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. Certain information contained in this press release includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (as defined in Section 27-A of the Securities Act and Section 21-E of the Exchange Act) that reflect the Company's current views with respect to future events and financial performance. Certain factors such as changes in competitive pressures, success of strategic initiatives, continued industry consolidation, customer mix and other matters contained in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for its 1998 fiscal year and other public documents could cause actual results to differ materially from those in the forward looking statements. The Company assumes no obligation to update the matters discussed in this press release. -0-
AMERISOURCE HEALTH CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)
Three Three
Months Ended % of Months Ended
Dec. 31, Operating Dec. 31,
1998 Revenue 1997
------------- ------------ ------------
Revenue:
Operating revenue $2,160,904 100.00% $2,254,560
Bulk deliveries to
customer
warehouses 8,762 24,998
------------- ------------
Total revenue 2,169,666 2,279,558
Cost of goods sold:
Operating cost of
goods sold 2,059,211 95.29% 2,148,954
Cost of goods
sold - bulk
deliveries 8,762 24,998
------------- ------------
Total cost of
goods sold 2,067,973 2,173,952
------------- -------------
Gross profit 101,693 4.71% 105,606
Operating
expenses:
Selling and
administrative 61,013 2.82% 65,765
Depreciation 3,500 0.16% 3,155
Amortization 256 0.01% 282
------------- -------------
Operating income 36,924 1.71% 36,404
Interest expense 8,141 0.38% 12,662
------------- ------------
Income before
taxes 28,783 1.33% 23,742
Taxes on income 10,938 0.51% 9,259
------------- ------------
Net income $17,845 0.83% $14,483
============= ============
Earnings per
share:
Basic $0.74 $0.61
Assuming dilution 0.73 0.60
Weighted average
common shares
outstanding:
Basic 24,184 23,856
Assuming dilution 24,434 24,224
% of
Operating %
Revenue Change
------------- -------------
Revenue:
Operating revenue 100.00% -4%
Bulk deliveries to
customer
warehouses
Cost of goods sold:
Operating cost of
goods sold 95.32% -4%
Cost of goods
sold - bulk
deliveries
Gross profit 4.68% -4%
Operating
expenses:
Selling and
administrative 2.92% -7%
Depreciation 0.14% 11%
Amortization 0.01% -9%
Operating income 1.61% 1%
Interest expense 0.56% -36%
Income before
taxes 1.05% 21%
Taxes on income 0.41% 18%
Net income 0.64% 23%
AMERISOURCE HEALTH CORPORATION
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
ASSETS (unaudited)
Dec. 31, Sept. 30, Increase
1998 1998 (Decrease)
-------------- ------------ -------------
Current assets:
Cash and cash
equivalents $44,406 $48,461 ($4,055)
Restricted cash 31,526 37,044 (5,518)
Accounts
receivable,
less allowance
for doubtful
accounts 522,044 458,238 63,806
Merchandise
inventories 1,066,567 870,223 196,344
Prepaid expenses
and other 3,150 4,356 (1,206)
-------------- ----------- -------------
Total current
assets 1,667,693 1,418,322 249,371
Property and
equipment, net 59,851 60,789 (938)
Other assets,
less accumulated
amortization 79,374 73,171 6,203
-------------- ------------ -------------
Total assets $1,806,918 $1,552,282 $254,636
=============== ============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
liabilities:
Accounts
payable $908,529 $873,181 $35,348
Accrued
expenses and
other 42,158 48,532 (6,374)
Accrued
income taxes 11,629 78 11,551
Deferred income
taxes 97,430 93,385 4,045
----------- ----------- -----------
Total current
liabilities 1,059,746 1,015,176 44,570
Long-term debt:
Revolving credit
facility 331,660 145,000 186,660
Receivables
securitization
financing 299,956 299,948 8
Other debt 8,654 8,813 (159)
Other liabilities 8,730 8,036 694
Stockholders' equity:
Common stock and
capital in excess
of par value 249,956 244,938 5,018
Retained earnings
(deficit) (145,564) (163,409) 17,845
Cost of common
stock in treasury (6,220) (6,220) 0
------------ ------------ ------------
Total
stockholders'
equity 98,172 75,309 22,863
------------ ------------ ------------
Total
liabilities and
stockholders'
equity $1,806,918 $1,552,282 $254,636
============= ============= ============
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