AmerisourceBergen Reports Earnings Per Share Up 48 Percent to $0.86 Before Special Charges in June Quarter.Business Editors 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.--(BUSINESS WIRE)--July 31, 2002 Synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. Capture and Low Interest Expense Continue to Drive Results 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 third quarter and nine months ended June June: see month. 30, 2002. AmeriSource Health Corporation and Bergen Bergen, city, Norway Bergen (bĕr`gən), city (1995 pop. 221,645), capital of Hordaland co., SW Norway, situated on inlets of the North Sea. It is Norway's second largest city and a major shipping center. Brunswig Corporation merged on August 29, 2001 to form AmerisourceBergen Corporation. Under purchase accounting rules, AmerisourceBergen's fiscal 2002 third quarter and nine-month results are compared with the fiscal 2001 third quarter and nine-month results of AmeriSource only. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma data included in this discussion refers to the combined predecessor predecessor - parent companies' operating results in the previous year's third quarter and first nine months, adjusted to eliminate amortization of goodwill. Both former companies had the same fiscal year ending September September: see month. 30. 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 before special charges for the third quarter of fiscal 2002 were $0.86, a 48 percent increase over the previous year's third quarter. Income before special charges for the third quarter of fiscal 2002 increased to $95.1 million from $32.1 million in the same period last year. Special charges, consisting of merger integration costs, were $4.9 million, net of tax, in the quarter. Net income and diluted earnings per share for the quarter were $90.2 million and $0.82, respectively. AmerisourceBergen's 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. , which excludes bulk deliveries to customer warehouses, was $10.3 billion in the third quarter of fiscal 2002 compared to $3.5 billion for the same period last year. Fiscal 2002 third quarter operating revenue increased 14 percent over fiscal 2001 third quarter pro forma operating revenue of $9.0 billion. For the first nine months of fiscal 2002, diluted earnings per share before special charges were $2.41, a 46 percent increase over the prior year. Special charges, consisting of merger integration costs, were $12.3 million, net of tax, in the first nine months of fiscal 2002. Operating revenue for the nine-month period ended June 30, 2002 was $29.9 billion compared to $10.3 billion in the prior year, and represents a 17 percent increase over pro forma operating revenue of $25.5 billion in the first nine months of fiscal 2001. Net income and diluted earnings per share for the nine-month period ended June 30, 2002 were $250.0 million and $2.30, respectively. For the third quarter of fiscal 2002, interest expense, including pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern distributions on preferred securities of a subsidiary trust, was $33.3 million, reflecting disciplined asset management and a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. interest rate environment. The following discussion of results, including segment data, does not include the impact of the special charges in the third quarter and first nine months of fiscal 2002. "This was another exceptional performance by AmerisourceBergen, demonstrating our continuing ability to leverage the cost saving and scale synergies of our new company," 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 President and Chief Executive Officer. "We continued to capture synergy cost savings from the merger earlier than expected, and new scale synergies are improving contributions from pharmaceutical purchasing. Strong working capital management and a historically low interest rate environment also positively impacted the Company's performance. All these factors drove excellent earnings per share growth, operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: expansion and a very strong return on committed capital (ROCC ROCC Range Operations Control Center ROCC Regional Operations Control Center ROCC Rail Operations Control Center ROCC Residents of Color Council ROCC Royal Oak Community Coalition (Michigan) ) of 24.6 percent. "During the quarter we announced and this month completed the $120 million acquisition of AutoMed Technologies, Inc. This acquisition, which is expected to be slightly accretive to earnings, enhances our position in the pharmaceutical supply chain by providing our retail and institutional customers with a 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. automation solution that reduces the cost of drug dispensing dispensing provision of drugs or medicines as set out properly on a lawful prescription. A prescription can only be filled, the drugs supplied, by a registered pharmacist, veterinarian, dentist or member of the medical profession. , improves dispensing accuracy and addresses staffing pressures." Segment Discussion AmerisourceBergen operates in two segments: Pharmaceutical Distribution (which includes the AmerisourceBergen Drug Company and AmerisourceBergen Specialty Group  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . operations) and 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. (which includes the institutional pharmacy 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. fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. businesses). Intersegment sales of $189.7 million in the third quarter of fiscal 2002 from AmerisourceBergen Drug Company to PharMerica, which are included in the Pharmaceutical Distribution segment operating revenue, are eliminated for 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: reporting purposes. Pharmaceutical Distribution Segment Operating revenue in the third quarter of fiscal 2002 increased to $10.1 billion compared with $3.5 billion in the previous year's third quarter. Operating revenue increased 14 percent over fiscal 2001 third quarter pro forma revenue of $8.8 billion. Pharmaceutical Distribution customer mix in the third quarter of fiscal 2002 was 52 percent institutional and 48 percent retail. AmerisourceBergen is the market leader in pharmaceutical distribution to hospital systems and acute care facilities, 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. care facilities, independent community pharmacies This article is a list of major pharmacies (also known as chemists and drugstores) by country. Australia Pharmacies in Australia are mostly independently-owned by pharmacists, often operated as franchises of retail brands offered by the three major , and regional chain store pharmacies. 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. was $169.1 million in the third quarter of fiscal 2002, up from $61.1 million for the same quarter last year, and improved 14 percent compared to pro forma operating income of $147.8 million in the same period last year. For the fiscal 2002 third quarter, operating income, as a percentage of operating revenue, was 1.68 percent, a slight improvement from the prior year's third quarter on a pro forma basis. Lower gross margins, which reflect the Company's customer mix and the competitive environment, were more than offset by lower total 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. as a percentage of operating revenue. Total operating expenses as a percentage of operating revenue in the fiscal 2002 third quarter were 2.15 percent, a 24 basis point improvement over the same quarter last year on a pro forma basis driven by synergy cost savings, customer mix and operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. . AmerisourceBergen Specialty Group, 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. revenue well over $2.5 billion, had another very strong quarter, building significant positions in 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. , blood plasma blood plasma n. The yellow or gray-yellow, protein-containing fluid portion of blood in which the blood cells and platelets are normally suspended. and vaccine vaccine Preparation containing either killed or weakened live microorganisms or their toxins, introduced by mouth, by injection, or by nasal spray to stimulate production of antibodies against an infectious agent. distribution as well as growing its manufacturing services businesses. "The momentum from our integration activities continues to build. Distribution center consolidations are on schedule and going smoothly. Last week we successfully completed the consolidation of our Portland Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. , Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. distribution center into our Seattle Seattle (sēăt`əl), city (1990 pop. 516,259), seat of King co., W Wash., built on seven hills, between Elliott Bay of Puget Sound and Lake Washington; inc. 1869. facility. Three additional distribution centers are scheduled for consolidation by the end of September, bringing the total number of consolidations in the fiscal year to seven, in line with the goal we set at the beginning of the year," 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 Executive Vice 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. . "We also continue to leverage our larger scale as our new 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. pharmaceutical program gained traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. in the marketplace and our common employee benefits plan was rolled out July July: see month. 1, 2002. Our recently combined sales force hosted the highly successful first annual AmerisourceBergen Healthcare Conference for customers, establishing the largest such event in the industry with over 6,000 people in attendance." PharMerica PharMerica's operating revenue for the third quarter of fiscal 2002 was $373.8 million, representing an 11 percent increase over pro forma operating revenue of $336.8 million in the same period last year. Operating income for the third quarter of fiscal 2002 was $21.8 million, a 28 percent increase over the prior year's pro forma third quarter operating income of $17.0 million. Operating income as a percentage of operating revenue increased 79 basis points in the quarter ended June 30, 2002 to 5.82 percent from 5.03 percent on a pro forma basis in the prior year. "Double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. revenue growth reflected continued strong performance by PharMerica's workers compensation business, as well as improved growth in 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. business," said Hilzinger. "Cost savings from expense control, driven by the favorable effect of a single information technology platform and continued accounts receivables accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying discipline, as well as the positive impact of the new 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. program, enhanced PharMerica's performance in the quarter." Looking Ahead "We expect continued strong performance for AmerisourceBergen for the fiscal 2002 fourth quarter with diluted earnings per share excluding special charges in the range of $0.83 to $0.85, ROCC in excess of our 20 percent target, and revenue growth consistent with the third quarter fiscal 2002 performance," said Yost. "We are increasing our diluted earnings per share estimate for fiscal year 2002, excluding the impact of merger-related special charges, from $3.15 to a range of $3.24 to $3.26, the third estimate increase this fiscal year. The increase in earnings expectations for the year reflects the solid performance of our businesses in the third quarter, early capture of cost saving synergies, and continued low interest rates. We remain confident in our ability to achieve annual cost saving synergies of $150 million by the end of fiscal year 2004." Also, in response to the recent order of the Security and Exchange Commission seeking sworn statements from the principal executive officers and principal financial officers of large public companies, Yost and Senior Vice President and Chief Financial Officer 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 each will file certifications by the August 14, 2002 deadline affirming that AmerisourceBergen's 10-K Report for fiscal 2001, 10-Q Reports for fiscal 2002, and 2002 Annual Meeting proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. were materially complete and truthful." Conference Call The Company will host a conference call to discuss the results at 11:00 a.m. Eastern Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time on July 31, 2002. Participating in the conference call will be: R. David Yost, President & Chief Executive Officer; Kurt J. Hilzinger, Executive Vice President & Chief Operating Officer; and Michael D. DiCandilo, Senior Vice President & Chief Financial Officer.
To access the live conference call via telephone:
Dial in:
800-553-5260 from inside the U.S. no access code required
or 612-332-1210 from outside the U.S. no access code required.
To access the live webcast:
Go to the Quarterly Webcasts section on the Investor Relations
page at http://www.amerisourcebergen.net.
A replay of the telephone call and webcast will be available from
4:15 p.m. July 31, 2002 until 11:59 p.m. August 7, 2002.
To access the replay via telephone:
Dial in:
800-475-6701 from within the U.S., access code: 643950
320-365-3844 from outside the U.S., access code: 643950
To access the archived webcast:
Go to the Quarterly Webcasts section on the Investor Relations
page at http://www.amerisourcebergen.net.
About AmerisourceBergen AmerisourceBergen (NYSE:ABC) is the largest pharmaceutical services company in 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. dedicated solely to the pharmaceutical supply chain. It is the leading distributor of pharmaceutical products and services to the hospital systems and acute care market, alternate care facilities, independent community pharmacies, and regional chain pharmacies. The Company is also a leader in the institutional pharmacy marketplace. With more than $40 billion in annualized operating revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and employs more than 13,000 people serving over 25,000 customers. 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 press 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. The forward-looking statements herein include statements addressing future financial and operating results of AmerisourceBergen and the benefits and other aspects of the merger between Amerisource Health Corporation and Bergen Brunswig Corporation. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: the risk that the businesses of AmeriSource and Bergen Brunswig will not be integrated successfully; failure to obtain and retain expected synergies; and other 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 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. factors affecting the business of AmerisourceBergen generally. More detailed information about these 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 2001, its Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. for the first and second quarters of fiscal 2002, and the joint proxy See proxy server. (networking) proxy - A process that accepts requests for some service and passes them on to the real server. A proxy may run on dedicated hardware or may be purely software. statement-prospectus for the merger as filed on August 1, 2001. 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 Months
Ended % of Ended % of
June 30, Operating June 30, Operating %
2002 Revenue 2001 Revenue Change
----------- ------- ----------- ------- -------
Revenue:
Operating revenue $10,278,327 100.00% $3,518,852 100.00% 192%
Bulk deliveries
to customer
warehouses 1,342,500 77 --
----------- -----------
Total revenue 11,620,827 3,518,929 230%
Cost of goods sold 11,110,898 3,373,990 229%
----------- -----------
Gross profit 509,929 4.96% 144,939 4.12% 252%
Operating expenses:
Distribution,
selling and
administrative 304,299 2.96% 79,638 2.26% 282%
Depreciation and
amortization 14,740 0.14% 4,205 0.12% 251%
Merger costs 8,147 0.08% 903 0.03% --
----------- -----------
Operating income 182,743 1.78% 60,193 1.71% 204%
Equity in (income)
losses of
affiliates and
other (190) 0.00% 2,006 0.06% -109%
Interest expense 27,308 0.27% 7,361 0.21% 271%
----------- -----------
Income before taxes
and distributions
on preferred
securities of
subsidiary trust 155,625 1.51% 50,826 1.44% 206%
Income taxes 61,771 0.60% 19,320 0.55% 220%
----------- -----------
Income before
distributions on
preferred
securities
of subsidiary
trust 93,854 0.91% 31,506 0.90% 198%
Distributions on
preferred
securities of
subsidiary
trust, net of
income tax
benefit of
$2,388 3,630 0.04% -- 0.00% --
----------- -----------
Net income $ 90,224 0.88% $ 31,506 0.90% 186%
=========== ===========
Earnings per share:
Basic $ 0.86 $ 0.60
Diluted $ 0.82 $ 0.57
Weighted average
common shares
outstanding:
Basic 105,374 52,912
Diluted 112,891 59,578
----------------------------------------------------------------------
Pro forma results excluding merger costs in the three months ended
June 30, 2002 and 2001:
Operating income $ 190,890 $ 61,096
Net income $ 95,136 $ 32,066
Earnings per share:
Basic $ 0.90 $ 0.61
Diluted $ 0.86 $ 0.58
AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)
Nine Nine
Months Months
Ended % of Ended % of
June 30 Operating June 30 Operating %
2002 Revenue 2001 Revenue Change
----------- ------- ----------- ------- -------
Revenue:
Operating revenue $29,883,212 100.00% $10,306,288 100.00% 190%
Bulk deliveries
to customer
warehouses 3,750,662 834 --
----------- -----------
Total revenue 33,633,874 10,307,122 226%
Cost of goods
sold 32,138,019 9,873,581 225%
----------- -----------
Gross profit 1,495,855 5.01% 433,541 4.21% 245%
Operating expenses:
Distribution,
selling and
administrative 906,467 3.03% 241,745 2.35% 275%
Depreciation and
amortization 44,189 0.15% 12,380 0.12% 257%
Merger costs 20,385 0.07% 903 0.01% --
----------- -----------
Operating income 524,814 1.76% 178,513 1.73% 194%
Equity in losses
of affiliates
and other 1,187 0.00% 4,581 0.04% -74%
Interest expense 91,017 0.30% 30,030 0.29% 203%
----------- -----------
Income before
taxes and
distributions on
preferred
securities of
subsidiary trust 432,610 1.45% 143,902 1.40% 201%
Income taxes 171,740 0.57% 54,689 0.53% 214%
----------- -----------
Income before
distributions on
preferred
securities
of subsidiary
trust 260,870 0.87% 89,213 0.87% 192%
Distributions on
preferred
securities of
subsidiary
trust, net of
income tax
benefit
of $7,165 10,889 0.04% -- 0.00% --
----------- -----------
Net income $ 249,981 0.84% $ 89,213 0.87% 180%
=========== ===========
Earnings per share:
Basic $ 2.39 $ 1.69
Diluted $ 2.30 $ 1.64
Weighted average
common shares
outstanding:
Basic 104,505 52,656
Diluted 111,926 57,819
----------------------------------------------------------------------
Pro forma results excluding merger costs in the nine months ended
June 30, 2002 and 2001:
Operating income $ 545,199 $ 179,416
Net income $ 262,273 $ 89,773
Earnings per share:
Basic $ 2.51 $ 1.70
Diluted $ 2.41 $ 1.65
AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
ASSETS (Unaudited)
June 30 September 30, $
2002 2001 Change
----------- ----------- -----------
Current assets:
Cash and cash
equivalents $ 363,406 $ 297,626 $ 65,780
Accounts
receivable,
net 2,131,273 2,142,663 (11,390)
Merchandise
inventories 5,174,024 5,056,257 117,767
Prepaid
expenses and
other 18,793 15,956 2,837
----------- ----------- -----------
Total
current
assets 7,687,496 7,512,502 174,994
Long-term assets 2,745,198 2,778,743 (33,545)
----------- ----------- -----------
Total
assets $10,432,694 $10,291,245 $ 141,449
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
liabilities:
Accounts
payable $ 4,764,316 $ 4,991,884 ($ 227,568)
Current
portion of
long-term debt 45,000 2,468 42,532
Other current
liabilities 633,998 538,101 95,897
----------- ----------- -----------
Total current
liabilities 5,443,314 5,532,453 (89,139)
Long-term debt,
less current
portion 1,493,511 1,597,295 (103,784)
Other liabilities 30,678 48,317 (17,639)
Company-obligated
mandatorily
redeemable
preferred
securities of
subsidiary trust 275,120 274,616 504
Stockholders'
equity 3,190,071 2,838,564 351,507
----------- ----------- -----------
Total
liabilities
and
stockholders'
equity $10,432,694 $10,291,245 $ 141,449
=========== =========== ===========
AMERISOURCEBERGEN CORPORATION
SUMMARY SEGMENT INFORMATION
(dollars in thousands)
Three Months Ended June 30,
-------------------------------------------------------
Actual Actual Pro forma Actual % Pro
Operating 2002 2001 2001 (1) Change forma %
Revenue Change
------------- -------------------------------------------------------
Pharmaceutical
Distribution $10,094,205 $3,518,852 $8,835,163 187% 14%
PharMerica 373,791 -- 336,783 -- 11%
Intersegment
Eliminations (189,669) -- (176,831) -- 7%
------------ ----------- ----------- ------ ------
Operating
revenue $10,278,327 $3,518,852 $8,995,115 192% 14%
============ =========== =========== ====== ======
Three Months Ended June 30,
-------------------------------------------------------
Operating Actual Actual Pro forma Actual % Pro
Income (2) 2002 2001 2001 (1) Change forma %
Change
------------- -------------------------------------------------------
Pharmaceutical
Distribution $169,134 $61,096 $147,826 177% 14%
PharMerica 21,756 -- 16,956 -- 28%
------------ ----------- ----------- ------ ------
Operating
income $190,890 $61,096 $164,782 212% 16%
============ =========== =========== ====== ======
Percentages of
operating revenue (2):
Pharmaceutical
Distribution
Gross profit 3.83% 4.12% 4.06%
Operating
expenses 2.15% 2.38% 2.39%
Operating
income 1.68% 1.74% 1.67%
PharMerica
Gross profit 33.11% -- 34.80%
Operating
expenses 27.29% -- 29.76%
Operating
income 5.82% -- 5.03%
AmerisourceBergen
Corporation
Gross profit 4.96% 4.12% 5.29%
Operating
expenses 3.10% 2.38% 3.46%
Operating
income 1.86% 1.74% 1.83%
(1) Represents the combination of AmeriSource Health Corporation's
and Bergen Brunswig Corporation's previously reported financial
information. (See discussion under Pro Forma Information
Appendix - A(1)).
(2) Excludes merger costs.
AMERISOURCEBERGEN CORPORATION
SUMMARY SEGMENT INFORMATION
(dollars in thousands)
Nine Months Ended June 30,
-----------------------------------------------------
Pro
Operating Actual Actual Pro forma Actual % forma %
Revenue 2002 2001 2001 (1) Change Change
-------------- -----------------------------------------------------
Pharmaceutical
Distribution $29,367,184 $10,306,288 $25,100,466 185% 17%
PharMerica 1,088,967 -- 1,011,873 -- 8%
Intersegment
Eliminations (572,939) -- (565,713) -- 1%
------------ ------------ ------------ --------------
Operating
revenue $29,883,212 $10,306,288 $25,546,626 190% 17%
============ ============ ============ ==============
Nine Months Ended June 30,
-------------------------------------------------
Operating Actual Actual Pro forma Actual % Pro forma %
Income (2) 2002 2001 2001 (1) Change Change
--------------- -------------------------------------------------
Pharmaceutical
Distribution $484,586 $179,416 $408,630 170% 19%
PharMerica 60,613 -- 50,177 -- 21%
--------- --------- ---------- ------------------
Operating
income $545,199 $179,416 $458,807 204% 19%
========= ========= ========== ==================
Percentages of operating revenue (2):
Pharmaceutical
Distribution
Gross profit 3.85% 4.21% 4.14%
Operating
expenses 2.20% 2.47% 2.51%
Operating
income 1.65% 1.74% 1.63%
PharMerica
Gross profit 33.41% -- 35.49%
Operating
expenses 27.85% -- 30.53%
Operating
income 5.57% -- 4.96%
AmerisourceBergen
Corporation
Gross profit 5.01% 4.21% 5.47%
Operating
expenses 3.18% 2.47% 3.68%
Operating
income 1.82% 1.74% 1.80%
(1) Represents the combination of AmeriSource Health Corporation's
and Bergen Brunswig Corporation's previously reported financial
information. (See discussion under Pro Forma Information
Appendix - A(1)).
(2) Excludes merger costs.
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 available to common stockholders.
Three months ended Nine months ended
June 30, June 30,
2002 2001 2002 2001
------- ------- ------- -------
Net income $90,224 $31,506 $249,981 $89,213
Interest expense -
convertible
subordinated notes,
net of income taxes 2,481 2,513 7,442 5,599
------- ------- ------- -------
Income available to
common stockholders $92,705 $34,019 $257,423 $94,812
======= ======= ======= =======
Weighted average
common shares
outstanding 105,374 52,912 104,505 52,656
Effect of dilutive
securities:
Options to
purchase common
stock 1,853 1,002 1,757 993
Convertible
subordinated
notes 5,664 5,664 5,664 4,170
------- ------- ------- -------
Weighted average
common shares
outstanding -
diluted 112,891 59,578 111,926 57,819
======= ======= ======= =======
Earnings per share:
Basic $0.86 $0.60 $2.39 $1.69
Diluted $0.82 $0.57 $2.30 $1.64
Appendix - A(1)
Pro Forma Information
The historical consolidated financial summary and summary segment
information for the three-months and nine-months ended June 30, 2001,
included in this press release, reflect only the results of
AmeriSource Health Corporation, as predecessor to the Company. In
order to enhance comparability, the following schedules as well as the
summary segment information include fiscal 2001 financial data on a
pro forma basis. Within these schedules, pro forma refers to the
combined results of AmeriSource Health Corporation and Bergen Brunswig
Corporation and are not intended to be consolidated financial
statements of AmerisourceBergen prepared in accordance with generally
accepted accounting principles and do not represent consolidated
results as if the merger had occurred at the beginning of the periods
presented. In addition, they are not necessarily indicative of the
actual results which might have occurred had the operations and
management of AmeriSource Health Corporation and Bergen Brunswig
Corporation been combined at the beginning of fiscal 2001.
In addition, to enhance comparability of financial information
between fiscal years, the pro forma information for fiscal 2001
excludes the amortization of goodwill and special items related to the
merger and environmental remediation and reflects the full allocation
of Bergen Brunswig Corporation's former Corporate segment to the
Pharmaceutical Distribution and PharMerica segments.
Appendix - A(2)
AmerisourceBergen
Pro forma combined condensed financial information (1)
(dollars in thousands)
----------------------------------------------------------------------
Fiscal Year Ended September 30, 2001
----------------------------------------------------------
First Second Third Fourth Fiscal
Quarter Quarter Quarter Quarter Year
----------------------------------------------------------------------
Operating
revenue $8,083,535 $8,467,976 $8,995,115 $9,052,684 $34,599,310
==========================================================
Gross
profit $442,249 $480,035 $475,810 $482,647 $1,880,741
Distribution,
selling and
administrative
(2) 293,608 303,730 295,462 304,703 1,197,503
Depreciation 13,891 14,337 14,296 14,641 57,165
Amortization
(3) 1,553 1,140 1,270 1,427 5,390
---------------------------------------------------------
Operating
income $133,197 $160,828 $164,782 $161,876 $620,683
=========================================================
Gross profit
to operating
revenue 5.47% 5.67% 5.29% 5.33% 5.44%
Operating
expenses to
operating
revenue 3.82% 3.77% 3.46% 3.54% 3.64%
Operating
income
to operating
revenue 1.65% 1.90% 1.83% 1.79% 1.79%
(1) Represents the combination of AmeriSource Health Corporation's and
Bergen Brunswig Corporation's previously reported financial
information. (See discussion under Pro Forma Information Appendix
- A(1)).
(2) Excludes special items in the third and fourth quarters related to
the merger and enviromental remediation.
(3) Excludes amortization of goodwill.
Appendix - A(3)
AmerisourceBergen - Pharmaceutical Distribution
Pro forma combined condensed financial information (1)
(dollars in thousands)
----------------------------------------------------------------------
Fiscal Year Ended September 30, 2001
--------------------------------------------------------
First Second Third Fourth Fiscal Year
Quarter Quarter Quarter Quarter
----------------------------------------------------------------------
Operating
revenue $7,929,966 $8,335,337 $8,835,163 $8,885,145 $33,985,611
========================================================
Gross profit $322,096 $358,294 $358,619 $365,948 $1,404,957
Distribution,
selling and
administrative
(2), (3) 195,464 202,915 200,042 211,501 809,922
Depreciation 9,426 9,962 9,916 10,278 39,582
Amortization (4) 1,116 703 835 972 3,626
--------------------------------------------------------
Operating
income $116,090 $144,714 $147,826 $143,197 $551,827
========================================================
Gross profit to
operating
revenue 4.06% 4.30% 4.06% 4.12% 4.13%
Operating
expenses to
operating
revenue 2.60% 2.56% 2.39% 2.51% 2.51%
Operating
income to
operating
revenue 1.46% 1.74% 1.67% 1.61% 1.62%
(1) Represents the combination of AmeriSource Health Corporation's and
Bergen Brunswig Corporation's previously reported financial
information. (See discussion under Pro Forma Information Appendix
- A(1)).
(2) Excludes special items in the third and fourth quarters related to
the merger and enviromental remediation.
(3) Expenses previously reported in the Corporate segment for Bergen
Brunswig Corporation have been fully allocated to the
Pharmaceutical Distribution and PharMerica segments for
comparative purposes within this schedule.
(4) Excludes amortization of goodwill.
Appendix - A(4)
AmerisourceBergen - PharMerica
Pro forma combined condensed financial information (1)
(dollars in thousands)
----------------------------------------------------------------------
Fiscal Year Ended September 30, 2001
--------------------------------------------------------
First Second Third Fourth Fiscal Year
Quarter Quarter Quarter Quarter
----------------------------------------------------------------------
Operating
revenue $335,166 $339,924 $336,783 $338,135 $1,350,008
========================================================
Gross profit $120,153 $121,741 $117,191 $116,699 $475,784
Distribution,
selling and
administrative
(2), (3) 98,144 100,815 95,420 93,202 387,581
Depreciation 4,465 4,375 4,380 4,363 17,583
Amortization (4) 437 437 435 455 1,764
--------------------------------------------------------
Operating
income $17,107 $16,114 $16,956 $18,679 $68,856
========================================================
Gross profit
to operating
revenue 35.85% 35.81% 34.80% 34.51% 35.24%
Operating
expenses to
operating
revenue 30.74% 31.07% 29.76% 28.99% 30.14%
Operating
income to
operating
revenue 5.10% 4.74% 5.03% 5.52% 5.10%
(1) Represents the combination of AmeriSource Health Corporation's and
Bergen Brunswig Corporation's previously reported financial
information. (See discussion under Pro Forma Information Appendix
- A(1)).
(2) Excludes special items in the third and fourth quarters related to
the merger and enviromental remediation.
(3) Expenses previously reported in the Corporate segment for Bergen
Brunswig Corporation have been fully allocated to the
Pharmaceutical Distribution and PharMerica segments for
comparative purposes within this schedule.
(4) Excludes amortization of goodwill.
Appendix - A(5)
AmerisourceBergen - Intersegment Eliminations
Pro forma combined condensed financial information (1)
(dollars in thousands)
----------------------------------------------------------------------
Fiscal Year Ended September 30, 2001
--------------------------------------------------------
First Second Third Fourth Fiscal Year
Quarter Quarter Quarter Quarter
----------------------------------------------------------------------
Operating
revenue ($181,597) ($207,285) ($176,831) ($170,596) ($736,309)
========================================================
Gross profit $0 $0 $0 $0 $0
Distribution,
selling and
administrative -- -- -- -- --
Depreciation -- -- -- -- --
Amortization -- -- -- -- --
--------------------------------------------------------
Operating
income $0 $0 $0 $0 $0
========================================================
(1) Represents the combination of AmeriSource Health Corporation's and
Bergen Brunswig Corporation's previously reported financial
information. (See discussion under Pro Forma Information Appendix
- A(1)).
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