AmerisourceBergen Reports $0.73 in Diluted Earnings Per Share from Continuing Operations for the December Quarter, a 12 Percent Increase.Company Reaffirms Guidance for Fiscal Year 2009 VALLEY FORGE Valley Forge, on the Schuylkill River, SE Pa., NW of Philadelphia. There, during the American Revolution, the main camp of the Continental Army was established (Dec., 1777–June, 1778) under the command of Gen. George Washington. , Pa. -- AmerisourceBergen Corporation (NYSE NYSE See: New York Stock Exchange :ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. ) today reported that in its fiscal year 2009 first quarter, ended December 31, 2008, 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 from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the were $0.73, a 12 percent increase. Revenue in the quarter was $17.3 billion, a 0.3 percent increase. The Company reaffirmed its fiscal year 2009 guidance, saying it continues to expect diluted earnings per share from continuing operations to be in the range of $3.08 to $3.25, which represents a 7 percent to 12 percent increase over the $2.89 last fiscal year. Fiscal First Quarter Highlights * Revenue of $17.3 billion, up 0.3 percent. * Diluted earnings per share from continuing operations of $0.73, a 12 percent increase. * Operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. dollars, excluding facility consolidations, employee severance and other charges, were down from prior year's first quarter. * Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 1.14 percent, up 3 basis points. * Days-sales-outstanding average 18.3 days, down from 18.9 days in the prior year first quarter. * $88 million of share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. . "In the December quarter, we delivered solid performance reflecting our two growth drivers, generic drug generic drug, a drug sold or prescribed under the nonproprietary name of its active ingredients or under a generally descriptive name rather than under a brand or trade name. distribution and our specialty distribution and related services business," said 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 , AmerisourceBergen's President and Chief Executive Officer. "Revenue in the quarter was essentially flat, but would have increased 4.8 percent if adjusted for the negative impact of the July 1, 2008 loss of the direct-to-warehouse business of a large retail drug chain. A double-digit increase in the sale of generic drugs, especially those on our proprietary formulary formulary /for·mu·lary/ (for´mu-lar?e) a collection of recipes, formulas, and prescriptions. National Formulary see under N. for·mu·lar·y n. , PRxO([R])Generics Solution; good fee-for-service performance; and disciplined expense control drove profitability. We used $304 million of cash in our operations as we built normal seasonal inventories and continue to expect our free cash flow to be in the range of $460 million to $535 million for fiscal 2009. Our receivable days were down in the quarter; our balance sheet remains strong; and we have good financial flexibility." Results Highlights * Revenue: In the first quarter of fiscal 2009, revenue was $17.3 billion, up 0.3 percent compared to the same quarter in the previous fiscal year, due primarily to a 5 percent increase in Specialty Group revenue. AmerisourceBergen Drug Corporation revenue was down 1 percent due to the loss of business last July that negatively impacted revenue in the fiscal 2009 first quarter. * 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. : For the first quarter of fiscal 2009, operating expenses were $292.0 million compared with $291.6 million in the prior fiscal year's first quarter. Expenses for facility consolidations, employee severance and other, were $1.0 million and $177,000 in the first quarters of fiscal 2009 and 2008, respectively. * Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. : In the fiscal 2009 first quarter, operating income increased 3 percent to $197.9 million, due primarily to increased gross profit and expense management. In the prior year's fiscal first quarter, operating income was positively impacted by a $10 million settlement of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with a major competitor related to sales activities involving an independent retail group purchasing organization A group purchasing organization is an entity that leverages the purchasing power of a group of businesses to obtain discounts from vendors based on the collective buying power of the GPO members. Many GPOs are funded by administrative fees that are actually paid by the vendors. , as well as by $1.4 million representing the net positive impact from pharmaceutical manufacturer antitrust litigation and facility consolidation, employee severance and other costs. * Tax Rate: The effective tax rate for the first quarter of fiscal 2009 was 38.6 percent, compared to 38.2 percent in the previous fiscal year's first quarter. We continue to expect our annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. effective tax rate to be approximately 38.4 percent. * Earnings Per Share: Diluted earnings per share from continuing operations were up 12 percent to $0.73 in the first quarter of fiscal 2009 compared to $0.65 in the previous fiscal year's first quarter, which included $0.04 per diluted share from the net positive impact of the litigation settlement with a competitor and special items. * Shares Outstanding: Diluted average shares outstanding for the first quarter of fiscal year 2009 were 155.1 million, down nearly 12 million from the previous fiscal year's first quarter due primarily to share repurchases, net of option exercises. Key Ratios * Gross Margin: Gross profit as a percentage of revenue increased 3 basis points to 2.83 percent in the fiscal 2009 first quarter over the same period in the previous year driven by double-digit growth in generic sales and increased contribution from brand-name supplier fee-for-service agreements. The LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack charge in the fiscal 2009 first quarter was $5.0 million compared with a $3.1 million charge in the previous year's first quarter. * Operating Expense Ratio: Operating expenses as a percentage of revenue in the fiscal first quarter of 2009 were 1.68 percent, down 1 basis point from the same period in the previous fiscal year. * Operating Margin: Operating income as a percentage of revenue increased 3 basis points to 1.14 percent in the fiscal 2009 first quarter compared with the previous year's first quarter due to improved gross profit and solid expense management. Fiscal Year 2009 Expectations "Looking ahead, the Company continues to expect diluted earnings per share from continuing operations for fiscal year 2009 to be in a range of $3.08 to $3.25, which represents an increase of 7 percent to 12 percent over the $2.89 in fiscal year 2008," said R. David Yost, AmerisourceBergen President and Chief Executive Officer. "Also unchanged are our key assumptions supporting this diluted earnings per share range, which are: revenue growth of between 1 percent and 3 percent; operating margin expansion in the low to mid single digit basis point range; and free cash flow in the range of $460 million to $535 million, which includes capital expenditures in the $140 million range. Assumptions also include the expected repurchase of approximately $350 million of AmerisourceBergen common shares in fiscal 2009." Conference Call The Company will host a conference call to discuss its results at 11:00 a.m. Eastern Standard Time on January 22, 2009. Participating in the conference call will be: R. David Yost, President and Chief Executive Officer; and Michael D. DiCandilo, Executive Vice President and Chief Financial Officer of AmerisourceBergen Corporation, and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of AmerisourceBergen Drug Corporation. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] About AmerisourceBergen AmerisourceBergen is one of the world's largest pharmaceutical services companies serving the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada and selected global markets. Servicing both pharmaceutical manufacturers and healthcare providers in the pharmaceutical supply channel, the Company provides drug distribution and related services designed to reduce costs and improve patient outcomes. AmerisourceBergen's service solutions range from pharmacy automation and pharmaceutical packaging to reimbursement and pharmaceutical consulting services. With more than $70 billion in annual revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and employs approximately 10,000 people. AmerisourceBergen is ranked #28 on the Fortune 500 list. For more information, go to www.amerisourcebergen.com. 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. This news release contains forward-looking statements about AmerisourceBergen's future business and financial performance, estimates and prospects. These statements are based on management's current expectations and are subject to uncertainty and change in circumstances. Among the factors that could cause actual results to differ materially from those projected, anticipated or implied are the following: changes in pharmaceutical market growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. ; the loss of one or more key customer or supplier relationships; changes in customer mix; customer delinquencies, defaults or insolvencies; supplier defaults or insolvencies; changes in pharmaceutical manufacturers' pricing and distribution policies or practices; adverse resolution of any contract or other dispute with customers or suppliers; federal and state government enforcement initiatives to detect and prevent suspicious orders of controlled substances controlled substance n. a drug which has been declared by federal or state law to be illegal for sale or use, but may be dispensed under a physician's prescription. and the diversion of controlled substances; changes in U.S. legislation or regulatory action affecting pharmaceutical product pricing or reimbursement policies, including under Medicaid and Medicare; changes in regulatory or clinical medical guidelines and/or labeling for the pharmaceuticals we distribute, including erythropoiesis-stimulating agents (ESAs) used to treat anemia patients; price inflation in branded pharmaceuticals and price deflation deflation: see inflation. deflation Contraction in the volume of available money or credit that results in a general decline in prices. A less extreme condition is known as disinflation. in generics; significant breakdown or interruption of our information technology systems; success of integration, restructuring or systems initiatives; interest rate and foreign currency exchange rate fluctuations; economic, business, competitive and/or regulatory developments in Canada, the United Kingdom and elsewhere outside of the United States; the impact of divestitures or the acquisition of businesses that do not perform as we expect or that are difficult for us to integrate or control; our inability to successfully complete any other transaction that we may wish to pursue from time to time; changes in tax legislation or adverse resolution of challenges to our tax positions; increased costs of maintaining, or reductions in our ability to maintain, adequate liquidity and financing sources; continued volatility and further deterioration of the capital and credit markets; and other economic, business, competitive, legal, tax, regulatory and/or operational factors affecting our business generally. Our most recent annual report on 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. , quarterly reports on Forms 10-Q and current reports 8-K (which we may revise or supplement in future reports filed to the SEC) provide additional information about these risks, uncertainties and other matters. We do not undertake to update our forward-looking statements. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion