AmerisourceBergen Reports Record Operating Revenue of $14 Billion and $0.61 Diluted Earnings Per Share from Continuing Operations for the March Quarter.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 second quarter ended March 31, 2006. 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). ). All prior year share and per share amounts referenced in this news release were adjusted to reflect the Company's December December: see month. 2005 two-for-one stock split.
Fiscal Second Quarter Highlights
-- Diluted earnings per share from continuing operations of
$0.61, including a $0.06 benefit from special items, up 33
percent.
-- Record operating revenue of $14.0 billion, up 15 percent.
-- Cash flow from operations of $472 million.
Fiscal First Six Months Highlights
-- Diluted earnings per share from continuing operations of
$1.08, including a $0.09 benefit from special items, up 38
percent.
-- Record operating revenue of $27.6 billion, up 13 percent.
-- Cash flow from operations of $703 million.
"Our outstanding performance in the March quarter continues our commitment to deliver solid and consistent growth," 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. "Our record $14.0 billion in 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. was well above our expectations, and our outstanding earnings per share performance is the result of successful implementation of new fee-for-service fee-for-ser·vice adj. Charging a fee for each service performed. agreements 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. opportunities, continued strong growth in 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. business, and our significant financial leverage. We also completed three acquisitions in the quarter. With $1.8 billion in cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, our balance sheet continues to be strong and our financial flexibility significant." Discussion of Results AmerisourceBergen's operating revenue was a record $14.0 billion in the second quarter of fiscal 2006 compared to $12.2 billion for the same period last year, a 15 percent increase. Bulk deliveries in the quarter increased 24 percent to $1.2 billion from $0.95 billion in last fiscal year's second 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 fiscal 2006 second quarter increased 10 percent to $197.9 million, primarily due to the performance of the Pharmaceutical Distribution segment. In addition, a $9.4 million gain from the settlement of a pharmaceutical 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. case, less $3.6 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 transition 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, had a net $5.8 million positive impact on consolidated operating income in the fiscal 2006 second quarter. In the previous fiscal year's second quarter, charges for facility consolidations and employee severance were $1.8 million and the Company incurred an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $5.3 million. Included in other income of $5.8 million for the second quarter of fiscal 2006 is $6.5 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the sale of a small investment and an eminent domain eminent domain, the right of a government to force the owner of private property sell it if it is needed for a public use. The right is based on the doctrine that a sovereign state has dominion over all lands and buildings within its borders, which has its origins in settlement. Net interest expense in the second quarter of fiscal 2006 was a low $7.3 million compared to $14.5 million in the prior year's second quarter, a 49 percent decrease. The effective tax rate for the second quarter of fiscal 2006 was 34.5 percent, down from 38.4 percent in the previous fiscal year's second quarter, primarily due to $5.5 million of favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. tax adjustments in the quarter. Without the adjustments, the tax rate in the fiscal year 2006 second quarter would have been 37.3 percent, still down from the prior year's second quarter due to the shift of the Company's invested cash to more tax-free tax-free adj. Not subject to taxation; tax-exempt. tax-free Adjective not needing to have tax paid on it: a tax-free lump sum Adj. 1. investments. The Company expects the tax rate for the remaining six months of fiscal 2006 to be between 37 percent and 38 percent. 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 $0.61 in the second quarter of fiscal 2006, compared to $0.46 in the previous fiscal year's second quarter, a 33 percent increase. Special items in the second quarter of fiscal 2006, which include the gain from the antitrust litigation, the investment sale and the eminent domain settlement, and the tax adjustments, less the charge for facility consolidation, employee severance and information technology transition costs, resulted in a benefit, net of tax, of $13.5 million or $0.06 per 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. share. In the same period of the previous fiscal year, there were $4.4 million of special charges, net of tax, which decreased diluted earnings per share by $0.02. Diluted average shares outstanding for the second quarter of fiscal year 2006 were 210.8 million, down nearly 10 million from the previous fiscal year's second quarter due to 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. . Cash generated from operations in the second quarter of fiscal year 2006 was $472 million and in the first six months of fiscal 2006 was $703 million. For the first six months of fiscal 2006, AmerisourceBergen's operating revenue was $27.6 billion compared to $24.4 billion for the same period last year, a 13 percent increase. Bulk deliveries in the first half of the fiscal year decreased 4 percent to $2.3 billion. Consolidated operating income in the first six months of the fiscal year increased 16 percent to $364.5 million primarily due to improved gross margin in the Pharmaceutical Distribution segment. For the first six months of fiscal 2006, diluted earnings per share from continuing operations were $1.08, compared to $0.78, before the cumulative effect of a change in accounting, in the same six-month period last year. "For the fiscal 2006 second quarter, excellent operating performance in the Pharmaceutical Distribution segment more than offset the 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. . "Strong revenues from our larger, lower-margin customers and new business drove the Drug Corporation's revenue growth, while contributions from our fee-for-service agreements and generic pharmaceuticals programs were the primary drivers of gross margin. Benefits from Optimiz(R), our program to enhance the efficiency of our distribution center network, continued to improve our cost structure and remains on schedule and on budget. Our customer-focused Transform program to improve value to the customer and deliver better margins for the Drug Corporation was also a contributor in the quarter. During the quarter we also purchased a Western Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. distributor to expand our operations in 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 . "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 $8.5 billion, our Specialty Group continued its strong growth and performance. Its 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, which continue to grow faster than the overall pharmaceutical market, its other distribution businesses in such areas as plasma and nephrology nephrology Branch of medicine dealing with kidney function and diseases. An understanding of kidney physiology is important not only in treating kidney disease but in knowing the effect of drugs, diet, and hypertension on kidney disease, and vice versa. , and its manufacturing services, including reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. consulting, all contributed to the Group's accelerating revenue and earnings performance. In February February: see month. , the Group completed the acquisition of Network for Medical Communications & Research, a provider of 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. physician education 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 in oncology. "The Packaging Group continued to deliver solid results on its growing pipeline of contract packaging programs for manufacturers and to expand its compliance packaging solutions for healthcare providers. In March, the Group acquired Brecon Brecon (brĕk`ən) or Brecknock (brĕk`nŏk, –nək), town (1981 pop. 7,422), Powys, S Wales, at the junction of the Honddu and Usk rivers. Pharmaceuticals, a contract and clinical trials packager located in Wales Wales, Welsh Cymru, western peninsula and political division (principality) of Great Britain (1991 pop. 2,798,200), 8,016 sq mi (20,761 sq km), west of England; politically united with England since 1536. The capital is Cardiff. , United Kingdom. The addition will expand the Group's geographical ge·o·graph·ic also ge·o·graph·i·cal adj. 1. Of or relating to geography. 2. Concerning the topography of a specific region. ge reach to include packaging for the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. and Asian markets. "Our PharMerica segment continued to be negatively impacted in the second quarter as its business model transitions under 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. Revenue, however, improved 6 percent over the previous fiscal year's second quarter, due to 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' ability to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. its national footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. and deploy new technology offerings to customers." Segment Review AmerisourceBergen operates in two reportable segments: Pharmaceutical Distribution (which includes the operations of AmerisourceBergen Drug Corporation, Specialty Group, and Packaging Group) and PharMerica (which includes the long-term care 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 $241.1 million in the second 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 Record operating revenue of $13.9 billion in the second quarter of fiscal 2006 was up 15 percent compared to the same quarter in the previous fiscal year. Strong growth in the Drug Corporation, primarily in large accounts and new business, coupled with continued strong performance in the Specialty Group, drove operating revenues above the Company's expectations. Pharmaceutical Distribution customer mix in the second 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 second quarter of fiscal 2006 was 3.16 percent compared to 3.21 percent in the same period in the prior fiscal year. 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 in the fiscal 2006 second quarter were 1.89 percent, down 0.04 percent from 1.93 percent in the prior year's second quarter. Segment operating income for the fiscal 2006 second quarter was $176.0 million, a 14 percent increase over the same period in fiscal 2005. Operating income as a percentage of operating revenue in the second quarter of fiscal 2006 was 1.27 percent, slightly below the 1.28 percent in the same quarter last fiscal year, and in the first six months of fiscal 2006 was 1.16 percent, an increase over the 1.04 percent in the first half of fiscal 2005. PharMerica PharMerica's revenue for the second quarter of fiscal 2006 was a record $412.7 million, a 6 percent increase over the previous year's second quarter. Operating income for the second quarter of fiscal 2006 was $16.2 million, compared to $32.0 million for the same quarter last year, reflecting increased bad debt expense and the cost of implementing Medicare Part D. Operating income as a percentage of revenue was 3.92 percent in the second quarter of fiscal 2006, below expectations. The second quarter of the previous fiscal year benefited from a $4.0 million reduction in sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. liability. The Company continues to expect operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: to be in the 4 percent to 5 percent range for fiscal year 2006. Looking Ahead "With 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 operating revenue will be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $14 billion in each of the remaining two quarters of this fiscal year, we expect the fiscal year 2006 operating revenue growth to be in a range of 10 percent to 12 percent, an increase from our previous range of 7 percent to 9 percent," said Yost. "We also are increasing our expectations for diluted earnings per share from continuing operations on a GAAP basis in the 2006 fiscal year to a range of $2.06 to $2.21 from the previous range of $1.98 to $2.13. This increase reflects the expected net benefit of $0.08 from special items including litigation gains; facility consolidation, severance and information technology transition charges; and the second quarter's investment sale, eminent domain settlement, and tax adjustments. Fiscal 2006 diluted earnings per share from continuing operations expectations continue to include the impact of a $0.04 to $0.05 charge for equity compensation expense. Our expectation for 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 for fiscal 2006 is being raised to a range $600 million to $700 million from the previous anticipation of $500 million to $600 million. "For fiscal 2006, we continue to expect operating margins from the Pharmaceutical Distribution segment to be in the range of 1.15 percent to 1.25 percent. With the operating revenue growth in the segment coming primarily from our largest customers, it is likely that the higher we may be in the operating revenue growth range the lower we will be in the operating margin range." AmerisourceBergen has repurchased $132 million of its stock during the first half of fiscal 2006 and 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 during fiscal 2006. Conference Call The Company will host a conference call to discuss its 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 April 26, 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: 612-288-0318, 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. April 26, 2006 until 11:59 p.m. May 3, 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: 825083
(320) 365-3844 from outside the U.S., access code: 825083
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. , 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 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 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 #27 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 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); further declines in the amounts of market share rebates offered by pharmaceutical manufacturers to the PharMerica long-term care business 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. the inability of the business to offset the rebate rebate, partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. reductions that have already occurred, market interest rates; operational or control issues arising from AmerisourceBergen's outsourcing of information technology activities; the Pharmaceutical Distribution segment's ability to continue to successfully 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 and other foreign exchange rates; economic, business, competitive and/or regulatory developments in Canada, the United Kingdom and elsewhere outside of the United States; 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
March 31, Operating March 31, Operating %
2006 Revenue 2005 Revenue Change
------------ --------- ------------ --------- -----
Revenue:
Operating
revenue $14,049,175 100.00% $12,241,739 100.00% 15%
Bulk deliveries
to customer
warehouses 1,171,504 948,428 24%
------------ ------------
Total revenue 15,220,679 13,190,167 15%
Cost of goods sold 14,659,916 12,688,417 16%
------------ ------------
Gross profit 560,763 3.99% 501,750 4.10% 12%
Operating
expenses:
Distribution,
selling and
administrative 339,113 2.41% 295,246 2.41% 15%
Depreciation and
amortization 20,149 0.14% 20,152 0.16% 0%
Facility
consolidations,
employee
severance, and
other 3,577 0.03% 1,837 0.02% 95%
Impairment charge - 0.00% 5,259 0.04% N/A
------------ ------------
Operating income 197,924 1.41% 179,256 1.46% 10%
Other (income) (5,826) -0.04% (383) 0.00% N/A
Interest expense,
net 7,344 0.05% 14,519 0.12% -49%
------------ ------------
Income from
continuing
operations before
income taxes 196,406 1.40% 165,120 1.35% 19%
Income taxes 67,816 0.48% 63,407 0.52% 7%
------------ ------------
Income from
continuing
operations 128,590 0.92% 101,713 0.83% 26%
(Income) loss from
discontinued
operations, net
of tax (411) 2,291
------------ ------------
Net income $129,001 0.92% $99,422 0.81% 30%
============ ============
Earnings per share:
Basic
Continuing
operations $0.62 $0.46 35%
Discontinued
operations - (0.01)
------------ ------------
Net income $0.62 $0.45 38%
============ ============
Diluted
Continuing
operations $0.61 $0.46 33%
Discontinued
operations - (0.01)
------------ ------------
Net income $0.61 $0.45 36%
============ ============
Weighted average
common shares
outstanding:
Basic 208,050 219,290
Diluted 210,771 220,468
AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)
Six Six
Months Ended % of Months Ended % of
March 31, Operating March 31, Operating %
2006 Revenue 2005 Revenue Change
------------ --------- ------------ --------- -----
Revenue:
Operating
revenue $27,585,029 100.00% $24,443,848 100.00% 13%
Bulk deliveries
to customer
warehouses 2,288,797 2,383,155 -4%
------------ ------------
Total revenue 29,873,826 26,827,003 11%
Cost of goods sold 28,784,685 25,870,661 11%
------------ ------------
Gross profit 1,089,141 3.95% 956,342 3.91% 14%
Operating expenses:
Distribution,
selling and
administrative 670,972 2.43% 590,071 2.41% 14%
Depreciation and
amortization 41,236 0.15% 40,701 0.17% 1%
Facility
consolidations,
employee
severance, and
other 12,404 0.04% 6,970 0.03% 78%
Impairment charge - 0.00% 5,259 0.02% N/A
------------ ------------
Operating income 364,529 1.32% 313,341 1.28% 16%
Other (income) (5,043) -0.02% (1,441) -0.01% N/A
Interest expense,
net 13,856 0.05% 36,597 0.15% -62%
Loss on early
retirement of debt - 1,015 0.00% N/A
------------ ------------
Income from
continuing
operations before
income taxes and
cumulative effect
of change in
accounting 355,716 1.29% 277,170 1.13% 28%
Income taxes 129,150 0.47% 106,434 0.44% 21%
------------ ------------
Income from
continuing
operations before
cumulative effect
of change in
accounting 226,566 0.82% 170,736 0.70% 33%
Loss from
discontinued
operations, net
of tax 298 10,196
Cumulative effect
of change in
accounting, net
of tax - 10,172
------------ ------------
Net income $226,268 0.82% $150,368 0.62% 50%
============ ============
Earnings per share:
Basic
Continuing
operations $1.09 $0.79 38%
Discontinued
operations - (0.05)
Cumulative
effect of
change in
accounting - (0.05)
Rounding - 0.01
------------ ------------
Net income $1.09 $0.70 56%
============ ============
Diluted
Continuing
operations $1.08 $0.78 38%
Discontinued
operations - (0.05)
Cumulative
effect of
change in
accounting - (0.05)
Rounding (0.01) 0.01
------------ ------------
Net income $1.07 $0.69 55%
============ ============
Weighted average
common shares
outstanding:
Basic 208,160 215,168
Diluted 210,570 221,864
AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
ASSETS
March 31, September 30,
2006 2005
------------- -------------
Current assets:
Cash and cash equivalents $1,051,725 $966,553
Short-term investment securities
available-for-sale 783,945 349,130
Accounts receivable, net 2,990,279 2,640,646
Merchandise inventories 4,353,870 4,003,690
Prepaid expenses and other 25,294 27,673
------------- -------------
Total current assets 9,205,113 7,987,692
Property and equipment, net 524,341 514,758
Other long-term assets 3,052,114 2,878,724
------------- -------------
Total assets $12,781,568 $11,381,174
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,319,118 $5,292,253
Current portion of long-term debt 3,043 1,232
Other current liabilities 810,292 758,611
------------- -------------
Total current liabilities 7,132,453 6,052,096
Long-term debt, less current portion 1,077,533 951,479
Other long-term liabilities 104,990 97,242
Stockholders' equity 4,466,592 4,280,357
------------- -------------
Total liabilities and stockholders'
equity $12,781,568 $11,381,174
============= =============
AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Six
Months Ended Months Ended
March 31, March 31,
2006 2005
------------ ------------
Operating Activities:
Net income $226,268 $150,368
Adjustments to reconcile net income to net
cash provided by operating activities 105,965 91,912
Changes in operating assets and
liabilities 370,405 950,726
------------ ------------
Net cash provided by operating activities 702,638 1,193,006
------------ ------------
Investing Activities:
Capital expenditures (60,149) (123,246)
Cost of acquired companies, net of cash
acquired (238,427) (588)
Proceeds from sale-leaseback transactions 28,143 20,732
Proceeds from sale of discontinued
operations - 3,560
Proceeds from sales of property and
equipment 6,012 -
Proceeds from sale of investment 3,769 -
Net purchases of short-term investment
securities available-for-sale (434,815) (299,745)
------------ ------------
Net cash used in investing activities (695,467) (399,287)
------------ ------------
Financing Activities:
Net debt borrowings (repayments) 124,916 (180,000)
Exercise of stock options 97,804 53,503
Cash dividends on common stock (10,464) (5,381)
Purchases of common stock (132,226) (675,348)
Deferred financing costs and other (2,029) (4,149)
------------ ------------
Net cash provided by (used in) financing
activities 78,001 (811,375)
------------ ------------
Increase (decrease) in cash and cash
equivalents 85,172 (17,656)
Cash and cash equivalents at beginning of
period 966,553 871,343
------------ ------------
Cash and cash equivalents at end of period $1,051,725 $853,687
============ ============
AMERISOURCEBERGEN CORPORATION
SUMMARY SEGMENT INFORMATION
(dollars in thousands)
(unaudited)
Three Months Ended March 31,
------------------------------------
Operating Revenue 2006 2005 % Change
--------------------------------- ------------------------------------
Pharmaceutical Distribution $13,877,560 $12,068,776 15%
PharMerica 412,685 391,090 6%
Intersegment eliminations (241,070) (218,127) -11%
------------ ------------
Operating revenue $14,049,175 $12,241,739 15%
============ ============
Three Months Ended March 31,
------------------------------------
Operating Income 2006 2005 % Change
--------------------------------- ------------------------------------
Pharmaceutical Distribution $175,951 $154,381 14%
PharMerica 16,171 31,971 -49%
Facility consolidations, employee
severance, and other (3,577) (1,837) -95%
Gain on antitrust litigation
settlement 9,379 - N/A
Impairment charge - (5,259) N/A
------------ ------------
Operating income $197,924 $179,256 10%
============ ============
Percentages of operating revenue:
Pharmaceutical Distribution
Gross profit 3.16% 3.21%
Operating expenses 1.89% 1.93%
Operating income 1.27% 1.28%
PharMerica
Gross profit 27.48% 29.25%
Operating expenses 23.56% 21.07%
Operating income 3.92% 8.17%
AmerisourceBergen Corporation
Gross profit 3.99% 4.10%
Operating expenses 2.58% 2.63%
Operating income 1.41% 1.46%
AMERISOURCEBERGEN CORPORATION
SUMMARY SEGMENT INFORMATION
(dollars in thousands)
(unaudited)
Six Months Ended March 31,
------------------------------------
Operating Revenue 2006 2005 % Change
--------------------------------- ------------------------------------
Pharmaceutical Distribution $27,225,713 $24,110,544 13%
PharMerica 821,943 776,711 6%
Intersegment eliminations (462,627) (443,407) -4%
------------ ------------
Operating revenue $27,585,029 $24,443,848 13%
============ ============
Six Months Ended March 31,
------------------------------------
Operating Income 2006 2005 % Change
--------------------------------- ------------------------------------
Pharmaceutical Distribution $314,827 $251,252 25%
PharMerica 34,678 55,493 -38%
Facility consolidations, employee
severance, and other (12,404) (6,970) -78%
Gain on antitrust litigation
settlements 27,428 18,825 46%
Impairment charge - (5,259) N/A
------------ ------------
Operating income $364,529 $313,341 16%
============ ============
Percentages of operating revenue:
Pharmaceutical Distribution
Gross profit 3.07% 2.97%
Operating expenses 1.91% 1.93%
Operating income 1.16% 1.04%
PharMerica
Gross profit 27.64% 28.47%
Operating expenses 23.42% 21.33%
Operating income 4.22% 7.14%
AmerisourceBergen Corporation
Gross profit 3.95% 3.91%
Operating expenses 2.63% 2.63%
Operating income 1.32% 1.28%
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 and
restricted stock. Additionally, the diluted earnings per share
calculations for the three and six months ended March 31, 2005
consider the convertible subordinated notes as if converted during the
periods that the notes were outstanding 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 for the periods that the notes were outstanding.
Three Months Ended Six Months Ended
March 31, March 31,
2006 2005 2006 2005
--------- --------- --------- ---------
Income from continuing
operations before cumulative
effect of change in
accounting $128,590 $101,713 $226,566 $170,736
Interest expense - convertible
subordinated notes, net of
income taxes - 28 - 2,539
--------- --------- --------- ---------
Income from continuing
operations available to
common stockholders $128,590 $101,741 $226,566 $173,275
========= ========= ========= =========
Weighted average common shares
outstanding - basic 208,050 219,290 208,160 215,168
Effect of dilutive securities:
Stock options and restricted
stock 2,721 954 2,410 900
Convertible subordinated
notes - 224 - 5,796
--------- --------- --------- ---------
Weighted average common shares
outstanding - diluted 210,771 220,468 210,570 221,864
========= ========= ========= =========
Earnings per share:
Basic
Continuing operations $0.62 $0.46 $1.09 $0.79
Discontinued operations - (0.01) - (0.05)
Cumulative effect of
change in accounting - - - (0.05)
Rounding - - - 0.01
--------- --------- --------- ---------
Net income $0.62 $0.45 $1.09 $0.70
========= ========= ========= =========
Diluted
Continuing operations $0.61 $0.46 $1.08 $0.78
Discontinued operations - (0.01) - (0.05)
Cumulative effect of
change in accounting - - - (0.05)
Rounding - - (0.01) 0.01
--------- --------- --------- ---------
Net income $0.61 $0.45 $1.07 $0.69
========= ========= ========= =========
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