AmerisourceBergen Reports December Quarter Results, with Diluted Earnings Per Share from Continuing Operations of $0.47; Record Operating Revenue of $13.5 Billion, up 11 Percent.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 AmerisourceBergen NYSE: ABC is a Chesterbrook, PA based Drug Wholesale company that was formed by the merger of Bergen Brunswig and AmeriSource in 2001. They provide drug distribution and related services designed to reduce costs and improve patient outcomes, distribute a line 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 results for its fiscal first quarter ended December December: see month. 31, 2005. The following results are presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Fiscal First Quarter Highlights --Diluted earnings per share 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 of $0.47, up 47 percent before the cumulative effect of the prior fiscal year accounting change. --Record 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. of $13.5 billion, up 11 percent. --Cash flow from operations of $230.5 million. --Record low net interest expense of $6.5 million. "Our outstanding performance in the December quarter exceeded our internal expectations and provides strong momentum for the remainder of fiscal 2006," 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 Chief Executive Officer. "Operating revenue was a record $13.5 billion, and the excellent earnings per share results were driven by strong performance under our new fee-for-service fee-for-ser·vice adj. Charging a fee for each service performed. agreements, the continued strength of our specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. pharmaceutical business and our significant financial leverage. With $1.5 billion in cash at the end of the first quarter, our balance sheet is the strongest in our history, and we maintain considerable financial flexibility." Discussion of Results AmerisourceBergen's operating revenue was $13.5 billion in the first quarter of fiscal 2006 compared to $12.2 billion for the same period last year, an 11 percent increase. Bulk deliveries in the quarter decreased 22 percent to $1.1 billion from $1.4 billion in last fiscal year's first quarter. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: 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 quarter increased 24 percent to $166.6 million, primarily due to increased gross margin in the Pharmaceutical Distribution segment. In addition, an $18.0 million gain from the settlements of drug manufacturer antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. 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. cases, less $8.8 million of charges for facility consolidations, employee severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when , and costs related to the outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. of information technology activities, had a net $9.2 million positive impact on consolidated operating income in the fiscal 2006 first quarter. Operating income in the first quarter of fiscal 2005 included an $18.8 million gain from antitrust litigation cases and charges for facility consolidations and employee severance of $5.1 million for a net positive impact of $13.7 million. Also impacting operating income this quarter was the Company's adoption of FAS 123R, which resulted in the Company's expensing stock options for the first time. As a result, equity compensation expense in the first quarter of fiscal 2006 was $2.6 million. Net interest expense in the fiscal 2006 first quarter was a record low $6.5 million compared to $22.1 million in the prior year's first quarter, a 71 percent decrease driven by net debt reduction. The effective tax rate for the first quarter of fiscal 2006 was 38.5 percent compared to 38.4 percent in the same period in fiscal 2005. 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 were $0.46 in the first quarter of fiscal 2006, compared to $0.24 in the previous fiscal year's first quarter. Diluted earnings per share from continuing operations, before the cumulative effect of an accounting change, in the first quarter of fiscal years 2006 and 2005 were $0.47 and $0.32, respectively, a 47 percent increase. The net per share impact of the gain from the litigation settlements and the charges from facility consolidations, employee severance and information technology outsourcing Information Technology Outsoucing or ITO is a company's outsourcing of computer or Internet related work, such as programming, to other companies. It is used in refence to Business Process Outsourcing or BPO, which is the outsourcing of the work that does not require so much was a positive $0.03 in first quarter fiscal 2006. In the first quarter of fiscal 2005, the net per share impact of the gain from litigation settlements and the charges from facility consolidations, employee severance, and the early retirement of debt, was also a positive $0.03. Average 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 for the first quarter of fiscal 2006 were 210.3 million, down from 223.2 million shares in the prior fiscal year's first quarter. The number of shares outstanding and the per share results reflect AmerisourceBergen's two-for-one stock split on December 28, 2005. "In the first quarter of fiscal 2006, outstanding operating performance in Pharmaceutical Distribution offset weak performance in PharMerica PharMerica is a publicly-traded Fortune 1000 company formed in January 2007 from the merger of Kindred Healthcare's pharmacy business with a subsidiary of AmerisourceBergen. ," said Kurt Kurt is a given name. Its principal English variant is Curt, while others include Cord, Curd, and Kort. It originated as a short form of Curtis, Konrad (Conrad), and Kunibert. J. Hilzinger, AmerisourceBergen's President 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. . "Our Specialty Group again delivered strong growth with 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. operating revenue of more than $8 billion, as our market-leading oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. businesses continued to grow faster than the overall pharmaceutical market and strong performances in the Group's other distribution businesses also contributed to revenue and earnings growth in the quarter. During the quarter, we signed a definitive agreement to purchase Network for Medical Communications & Research, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (NMCR NMCR New Markets Credit (IRS deduction) NMCR Navy-Marine Corps Relief Society ), a privately held provider of physician accredited accredited recognition by an appropriate authority that the performance of a particular institution has satisfied a prestated set of criteria. accredited herds cattle herds which have achieved a low level of reactors to, e.g. continuing medical education continuing medical education See CME. and analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. research for the oncology market for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $90 million, including assumed debt. The addition of NMCR will strengthen our oncology platform. "In the Drug Corporation, we significantly improved the gross margin through our efforts over the past several quarters, including completing and performing on fee-for-service agreements, improved generics contribution, and the customer-focused Transform initiatives. Benefits from Optimiz(R), our program to enhance the efficiency of our distribution center network, continued to improve our cost structure. Optimiz remains on schedule and on budget. "The Packaging Group continued to perform well in the quarter, exceeding internal revenue and gross margin expectations. The Group added new product packaging contracts to its growing pipeline, and is delivering new compliance and generic Generic Describes the characteristics and/or experience of the total universe of a coupon of MBS sector type; that is, in contrast to a specific pool or collateral group, as in a specific CMO issue. packaging solutions to the marketplace." "In our PharMerica segment, we continue to face a difficult environment. Increased revenue from new customers in the first quarter of fiscal 2006 could not offset the impact of larger than expected bad debt expense and the added cost of preparing for the implementation of Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. Part D on January January: see month. 1, 2006. With Medicare Part D implementation, this will continue to be a transition year for PharMerica," said Hilzinger. Segment Review AmerisourceBergen operates in two segments: Pharmaceutical Distribution (which includes the operations of AmerisourceBergen Drug Corporation, Specialty Group, and Packaging Group) and PharMerica (which includes the long-term care long-term care (LTC), n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. and workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. businesses). Intersegment sales of $221.6 million in the first quarter of fiscal 2006 from AmerisourceBergen Drug Corporation to PharMerica, which are included in the Pharmaceutical Distribution segment operating revenue, are eliminated for consolidated reporting purposes. Pharmaceutical Distribution Segment Operating revenue in the Pharmaceutical Distribution segment was $13.3 billion in the first quarter of fiscal 2006, an increase of 11 percent over the $12.0 billion of operating revenue in the same quarter of the previous fiscal year. Strong growth in the Specialty Group and Drug Corporation, especially in a few large institutional alternate alternate /al·ter·nate/ (awl´ter-nit) 1. following in turns. 2. pertaining to every other one in a series. 3. occurring in place of another; acting as a substitute. site customers, drove operating revenues above the Company's expectations in the quarter. Pharmaceutical Distribution customer mix in the first quarter of fiscal 2006 was 59 percent institutional and 41 percent retail. For the segment, gross profit as a percentage of operating revenue in the first quarter of fiscal 2006 was 2.97 percent, a 24 basis point improvement over 2.73 percent in the same period in the prior fiscal year. Total expenses as a percentage of operating revenue in the fiscal 2006 first quarter were 1.93 percent, the same as the first quarter of last fiscal year. Segment operating income for the first quarter of fiscal 2006 was $138.9 million, a 43 percent increase over the previous fiscal year's first quarter, and as a percentage of operating revenue, was 1.04 percent, a 24 basis point improvement from the first quarter of fiscal 2005. PharMerica PharMerica's operating revenue for the first quarter of fiscal 2006 was $409.3 million, compared with $385.6 million in the previous year's first quarter, up 6 percent. Operating income for the first quarter of fiscal 2006 was $18.5 million, down 21 percent from $23.5 million for the same quarter last fiscal year. Lower operating income was due primarily to increased bad debt expense and the cost of preparing for the implementation of the Medicare Modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, Act. Operating income as a percentage of revenue was 4.52 percent in the first quarter of fiscal 2006. Looking Ahead "As announced earlier this month, we expect the fiscal year 2006 revenue growth to be in the range of 7 percent to 9 percent, up from the previous range of 6 percent to 8 percent," said Yost. "We continue to expect diluted earnings per share from continuing operations in the range of $1.98 to $2.13 for fiscal year 2006. Diluted earnings per share from continuing operations expectations for the fiscal year include the impact of a $0.04 to $0.05 charge for equity compensation expense and the anticipation The performance of an act or obligation before it is legally due. In patent law, the publication of the existence of an invention that has already been patented or has a patent pending, that expected litigation recovery gains will be offset by expenses from facility consolidations, employee severance, and costs related to the outsourcing of information technology activities. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses is anticipated to be in the range of $500 million to $600 million. "For fiscal year 2006, we continue to expect operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the Pharmaceutical Distribution segment to be in the range of 1.15 percent to 1.25 percent. For the PharMerica segment, we continue to expect the revenue growth rate in fiscal year 2006 to be in the mid single digits. However, due to the impact of Medicare Part D, we have lowered our operating margin expectations to the 4 percent to 5 percent range from the previous expectation of the middle of the 5 percent to 6 percent range." AmerisourceBergen also continues to expect to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. a total of approximately $400 million to $450 million of its stock by the end of fiscal 2006. Conference Call The Company will host a conference call to discuss its results at 11:00 a.m. Eastern Standard Time on January 25, 2006. Participating in the conference call will be: R. David Yost, Chief Executive Officer; Kurt J. Hilzinger, President and Chief Operating Officer; and Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. D. DiCandilo, Executive Vice President and Chief Financial Officer.
To access the live conference call via telephone:
Dial in: (612) 332-1025, no access code required.
To access the live webcast:
Go to the Quarterly Webcasts section on the Investor Relations page at
http://www.amerisourcebergen.com.
A replay of the telephone call and webcast will be available from
2:30 p.m. January 25, 2006 until 11:59 p.m. February 1, 2006. The
Webcast replay will be available for 30 days.
To access the replay via telephone:
Dial in: 800-475-6701 from within the U.S., access code: 813006
(320) 365-3844 from outside the U.S., access code: 813006
To access the archived webcast:
Go to the Quarterly Webcasts section on the Investor Relations page at
http://www.amerisourcebergen.com.
About AmerisourceBergen AmerisourceBergen (NYSE:ABC) 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. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . 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 pharmacy services for skilled nursing and assisted living as·sist·ed living n. A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. facilities, reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. and pharmaceutical consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" , and physician education. With more than $54 billion in annual revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and employs more than 13,000 people. AmerisourceBergen is ranked #23 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 may contain certain "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. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Actual results may vary materially from the expectations contained in the forward-looking statements. Forward-looking statements may include statements addressing AmerisourceBergen's future financial and operating results and the benefits, efficiencies and savings to be derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from the Company's integration plans to consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. its distribution network. The following factors, among others, could cause actual results to differ materially from those described in any forward-looking statements: competitive pressures; the loss of one or more key customer or supplier relationships; customer defaults or insolvencies; changes in customer mix; supplier defaults or insolvencies; changes in pharmaceutical manufacturers' pricing and distribution policies or practices; adverse resolution of any contract or other disputes with customers (including departments and agencies of the U.S. Government) or suppliers; regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. changes; changes in U.S. government policies (including reimbursement changes arising from the Medicare Modernization Act); market interest rates; operational or control issues arising from AmerisourceBergen's outsourcing of information technology activities; success of the Pharmaceutical Distribution segment's ability to transition its business model to fee-for-service; success of integration, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). or systems initiatives; fluctuations in the U.S. dollar - Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents exchange rate; economic, business, competitive and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. regulatory developments in Canada; acquisition of businesses that do not perform as we expect or that are difficult for us to integrate or control; and other economic, business, competitive, legal, regulatory and/or operational factors affecting the business of AmerisourceBergen generally. More detailed information about these and other risk factors is set forth in AmerisourceBergen's filings with the Securities and Exchange Commission, including its 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. for fiscal 2005. AmerisourceBergen is under no obligation to (and expressly disclaims any such obligation to) update or alter any forward looking statements whether as a result of new information, future events or otherwise.
AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)
Three Three
Months Ended % of Months Ended % of
December 31, Operating December 31, Operating %
2005 Revenue 2004 Revenue Change
------------ --------- ------------ --------- ------
Revenue:
Operating
revenue $13,535,854 100.00% $12,202,109 100.00% 11%
Bulk deliveries
to customer
warehouses 1,117,293 1,434,727 -22%
------------ ------------
Total revenue 14,653,147 13,636,836 7%
Cost of goods
sold 14,124,769 13,182,244 7%
------------ ------------
Gross profit 528,378 3.90% 454,592 3.73% 16%
Operating
expenses:
Distribution,
selling and
administrative 331,859 2.45% 294,825 2.42% 13%
Depreciation and
amortization 21,087 0.16% 20,549 0.17% 3%
Facility
consolidations,
employee
severance, and
other 8,827 0.07% 5,133 0.04% 72%
------------ ------------
Operating income 166,605 1.23% 134,085 1.10% 24%
Other loss
(income) 783 0.01% (1,058) -0.01% N/A
Interest expense,
net 6,512 0.05% 22,078 0.18% -71%
Loss on early
retirement of
debt - 1,015 0.01% N/A
------------ ------------
Income from
continuing
operations
before income
taxes and
cumulative
effect of change
in accounting 159,310 1.18% 112,050 0.92% 42%
Income taxes 61,334 0.45% 43,027 0.35% 43%
------------ ------------
Income from
continuing
operations
before
cumulative
effect of change
in accounting 97,976 0.72% 69,023 0.57% 42%
Loss from
discontinued
operations, net
of tax 709 7,905
Cumulative effect
of change in
accounting, net
of tax - 10,172
------------ ------------
Net income $97,267 0.72% $50,946 0.42% 91%
============ ============
Earnings per
share:
Basic
Continuing
operations $0.47 $0.33 42%
Discontinued
operations - (0.04)
Cumulative
effect of
change in
accounting - (0.05)
------------ ------------
Net income $0.47 $0.24 96%
============ ============
Diluted
Continuing
operations $0.47 $0.32 47%
Discontinued
operations - (0.04)
Cumulative
effect of
change in
accounting - (0.05)
Rounding (0.01) 0.01
------------ ------------
Net income $0.46 $0.24 92%
============ ============
Weighted average
common shares
outstanding:
Basic 208,250 211,122
Diluted 210,349 223,214
AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
ASSETS
December 31, September 30,
2005 2005
------------- -------------
Current assets:
Cash and cash equivalents $1,506,088 $1,315,683
Accounts receivable, net 2,663,779 2,640,646
Merchandise inventories 4,972,288 4,003,690
Prepaid expenses and other 24,305 27,673
------------- -------------
Total current assets 9,166,460 7,987,692
Long-term assets 3,409,418 3,393,482
------------- -------------
Total assets $12,575,878 $11,381,174
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,307,065 $5,292,253
Current portion of long-term debt 1,243 1,232
Other current liabilities 797,799 758,611
------------- -------------
Total current liabilities 7,106,107 6,052,096
Long-term debt, less current portion 1,051,433 951,479
Other liabilities 98,625 97,242
Stockholders' equity 4,319,713 4,280,357
------------- -------------
Total liabilities and
stockholders' equity $12,575,878 $11,381,174
============= =============
AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Three
Months Ended Months Ended
December 31, December 31,
2005 2004
------------ ------------
Operating Activities:
Net income $97,267 $50,946
Changes in operating assets and
liabilities 81,077 9,929
Adjustments to reconcile net income to
net cash provided by operating
activities 52,163 61,858
------------ ------------
Net cash provided by operating activities 230,507 122,733
------------ ------------
Investing Activities:
Capital expenditures (27,913) (79,182)
Cost of acquired companies, net of cash
acquired (81,119) (786)
Proceeds from sale-leaseback transactions 28,143 20,732
Proceeds from sale of discontinued
operations - 3,560
Proceeds from sales of property and
equipment 1,868 23
------------ ------------
Net cash used in investing activities (79,021) (55,653)
------------ ------------
Financing Activities:
Net debt borrowings (repayments) 99,739 (180,000)
Exercise of stock options 33,607 30,084
Cash dividends on common stock (5,210) (2,628)
Purchases of common stock (88,922) (253,191)
Deferred financing costs and other (295) (3,149)
------------ ------------
Net cash provided by (used in) financing
activities 38,919 (408,884)
------------ ------------
Increase (decrease) in cash and cash
equivalents 190,405 (341,804)
Cash and cash equivalents at beginning of
period 1,315,683 871,343
------------ ------------
Cash and cash equivalents at end of period $1,506,088 $529,539
============ ============
AMERISOURCEBERGEN CORPORATION
SUMMARY SEGMENT INFORMATION
(dollars in thousands)
(unaudited)
Three Months Ended December 31,
-----------------------------------
Operating Revenue 2005 2004 % Change
---------------------------------- -----------------------------------
Pharmaceutical Distribution $13,348,153 $12,041,768 11%
PharMerica 409,258 385,621 6%
Intersegment eliminations (221,557) (225,280) 2%
------------ ------------
Operating revenue $13,535,854 $12,202,109 11%
============ ============
Three Months Ended December 31,
-----------------------------------
Operating Income 2005 2004 % Change
---------------------------------- -----------------------------------
Pharmaceutical Distribution $138,876 $96,871 43%
PharMerica 18,507 23,522 -21%
Facility consolidations, employee
severance, and other (8,827) (5,133) -72%
Gain on antitrust litigation
settlements 18,049 18,825 -4%
------------ ------------
Operating income $166,605 $134,085 24%
============ ============
Percentages of operating revenue:
Pharmaceutical Distribution
Gross profit 2.97% 2.73%
Operating expenses 1.93% 1.93%
Operating income 1.04% 0.80%
PharMerica
Gross profit 27.80% 27.69%
Operating expenses 23.27% 21.59%
Operating income 4.52% 6.10%
AmerisourceBergen Corporation
Gross profit 3.90% 3.73%
Operating expenses 2.67% 2.63%
Operating income 1.23% 1.10%
AMERISOURCEBERGEN CORPORATION
EARNINGS PER SHARE
(In thousands, except per share data)
(unaudited)
Basic earnings per share is computed on the basis of the weighted
average number of shares of common stock outstanding during the
periods presented. Diluted earnings per share is computed on the
basis of the weighted average number of shares of common stock
outstanding during the period plus the dilutive effect of stock
options. Additionally, the diluted earnings per share calculation
considers the convertible subordinated notes as if converted and,
therefore, the effect of interest expense related to those notes is
added back to net income in determining income from continuing
operations available to common stockholders.
Three Months
Ended
December 31,
2005 2004
-------- --------
Income from continuing operations, before cumulative
effect of change in accounting $97,976 $69,023
Interest expense - convertible subordinated notes,
net of income taxes - 2,511
-------- --------
Income from continuing operations available to common
stockholders $97,976 $71,534
======== ========
Weighted average common shares outstanding - basic 208,250 211,122
Effect of dilutive securities:
Options to purchase common stock 2,099 846
Convertible subordinated notes - 11,246
-------- --------
Weighted average common shares outstanding - diluted 210,349 223,214
======== ========
Earnings per share:
Basic
Continuing operations $0.47 $0.33
Discontinued operations - (0.04)
Cumulative effect of change in accounting - (0.05)
-------- --------
Net income $0.47 $0.24
======== ========
Diluted
Continuing operations $0.47 $0.32
Discontinued operations - (0.04)
Cumulative effect of change in accounting - (0.05)
Rounding (0.01) 0.01
-------- --------
Net income $0.46 $0.24
======== ========
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