Exhibit 99.1
NEWS RELEASE
[AmerisourceBergen Logo] AmerisourceBergen Corporation
P.O. Box 959
Valley Forge, PA 19482
CONTACT: MICHAEL N. KILPATRIC
610-727-7118
mkilpatric@amerisourcebergen.com
AMERISOURCEBERGEN REPORTS RECORD REVENUE AND
DILUTED EARNINGS PER SHARE FOR THE DECEMBER QUARTER
RECORD OPERATING REVENUE EXCEEDS $11 BILLION
DRIVEN BY A 14 PERCENT INCREASE IN PHARMACEUTICAL DISTRIBUTION
VALLEY FORGE, PA, JANUARY 24, 2003 -- AmerisourceBergen Corporation (NYSE:ABC)
today reported record results for its fiscal first quarter ended December 31,
2002. In compliance with recently issued Security and Exchange Commission
regulations, the following results are presented on a GAAP basis.
FISCAL FIRST QUARTER HIGHLIGHTS
- Diluted earnings per share of $0.84, up 33 percent.
- Net income of $92.7 million, up 37 percent.
- Record operating revenue of $11.1 billion, up 15 percent.
- Return On Committed Capital (ROCC) of 25.5 percent.
"This was another outstanding quarter at AmerisourceBergen," said R. David
Yost, AmerisourceBergen's Chief Executive Officer. "We delivered record
operating revenues with our first $11 billion quarter and achieved excellent
performance across all our businesses. Total operating expenses as a percentage
of operating revenue reached a historic low. Strong working capital management
and operating margin expansion combined to drive excellent earnings per share
growth.
"In January 2003, we expanded our position in the pharmaceutical supply
channel with the completion of two acquisitions, Bridge Medical, Inc. and US
Bioservices Corporation. Bridge provides the leading bedside bar-code scanning
software available today, improving patient safety in the dispensing of
pharmaceuticals. As part of our Specialty Group, US Bioservices broadens our
reimbursement consulting capability and expands our presence with manufacturers
NEWS RELEASE
in the delivery of high-value pharmaceutical therapies. We expect to continue to
seek accretive acquisitions that will enhance our position in this channel."
DISCUSSION OF RESULTS
Diluted earnings per share for the first quarter of fiscal 2003 were
$0.84, a 33 percent increase over the $0.63 in the prior year's first quarter.
Special items included in these results are a $0.84 million credit, net of tax,
in first quarter of fiscal 2003 and a $4.5 million charge, net of tax, in the
same period of the previous fiscal year. The fiscal 2003 credit is related to
the reversal of accruals recorded in the fourth quarter of fiscal year 2001 for
facility consolidation and employee severance activities, and the charge
reflects merger integration activities in the first quarter of fiscal 2002. The
earnings per share impact of the special items was an increase of $0.01 in the
first quarter of fiscal 2003 and a decrease of $0.04 in the first quarter of
fiscal 2002.
AmerisourceBergen's operating revenue, which excludes bulk deliveries to
customer warehouses, was $11.1 billion in the first quarter of fiscal 2003
compared to $9.7 billion for the same period last year, a 15 percent increase.
"Our excellent operational performance in the December quarter was driven
by our on-going focus on customer service, continued contributions from generic
pharmaceuticals, strong merger integration cost savings as we build our new
pharmaceutical distribution network, and solid working capital management," said
Kurt J. Hilzinger, AmerisourceBergen's President and Chief Operating Officer.
"The Company's leading customer service position was reinforced again
during the quarter, as Premier, one of the largest hospital purchasing
organizations in the U.S., named AmerisourceBergen the top national
pharmaceutical distributor in a recent customer service satisfaction survey. The
Company was also the leader in all previous surveys."
"During the quarter, we made significant strides in creating our new
pharmaceutical distribution network," he continued. "Construction is underway on
two of our planned six new distribution centers, one in Columbus, Ohio, and one
in Sacramento, California. We also completed the expansion of our Mansfield,
Massachusetts, facility and subsequently consolidated our other Boston area
facility into the newly expanded distribution center. We have now consolidated
eight of the 27 distribution centers scheduled for consolidation."
"In our PharMerica segment, strong operating revenue growth of 13 percent
reflects improved growth in our long-term care business as well as continued
strong growth in
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NEWS RELEASE
PharMerica's workers' compensation business," said Hilzinger. "Improved
operating practices and reductions in bad debt expenses drove operating expenses
down and expanded operating margins in the quarter."
SEGMENT REVIEW
AmerisourceBergen operates in two segments: Pharmaceutical Distribution
(which includes the AmerisourceBergen Drug Company and AmerisourceBergen
Specialty Group operations) and PharMerica (which includes the institutional
pharmacy and workers' compensation fulfillment businesses). Intersegment sales
of $195.5 million in the first quarter of fiscal 2003 from AmerisourceBergen
Drug Company 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 first quarter of fiscal 2003 increased to $10.9
billion compared with $9.5 billion in the first quarter of fiscal year 2002, a
14 percent increase.
Pharmaceutical Distribution customer mix in the first quarter of fiscal
2003 was 55 percent institutional and 45 percent retail. Both customer groups
had double-digit growth in the quarter.
Operating income was $162.9 million in the first quarter of fiscal 2003,
up 17 percent from $139.5 million for the same quarter last year. For the first
quarter of fiscal 2003, operating income as a percentage of operating revenue
was 1.49 percent, a 3 basis point improvement from the first quarter of fiscal
2002. Lower total operating expenses as a percentage of operating revenue offset
lower gross margins, which were impacted by the Company's customer mix and the
competitive environment.
Total operating expenses as a percentage of operating revenue in the first
quarter of fiscal 2003 were 2.10 percent, a 13 basis point improvement over the
same quarter last year, driven by merger integration cost savings, customer mix
and operating efficiencies.
AmerisourceBergen Specialty Group, with annualized revenue of more than $3
billion, continued its strong quarterly performance, building significant
positions in oncology, blood plasma, and injectables distribution as well as
growing its manufacturing services businesses.
PHARMERICA
PharMerica's operating revenue for the first quarter of fiscal 2003
increased 13 percent to $402.8 million from $355.4 million in the previous
year's first quarter.
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NEWS RELEASE
Operating income for the first quarter of fiscal 2003 was $23.5 million,
up 22 percent from $19.3 million for the same quarter last year. Operating
income as a percentage of operating revenue increased 41 basis points in the
quarter ended December 31, 2002 to 5.84 percent from 5.43 percent in the prior
year.
LOOKING AHEAD
"For the remainder of fiscal year 2003, we expect to grow operating
revenue approximately 13 percent, and earnings per share 20 percent, excluding
the impact of special items," said Yost. "ROCC is expected to remain well above
our 20 percent long-term target, and we remain confident in our ability to
achieve annual merger integration cost savings of approximately $150 million by
the end of fiscal year 2004, followed by additional cost savings as we complete
the build out of our distribution network."
CONFERENCE CALL
The Company will host a conference call to discuss the results at 11:00
a.m. Eastern Standard Time on January 24, 2003. Participating in the conference
call will be: R. David Yost, Chief Executive Officer; Kurt J. Hilzinger,
President and Chief Operating Officer; and Michael D. DiCandilo, Senior Vice
President and Chief Financial Officer.
To access the live conference call via telephone:
Dial in: (888) 428-4480 from inside the U.S., no access code required
or (651) 291-0900 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.com.
A replay of the telephone call and webcast will be available from 4:15 p.m.
January 24, 2003 until 11:59 p.m. January 31, 2003.
To access the replay via telephone:
Dial in: (800) 475-6701 from within the U.S., access code: 668095
(320) 365-3844 from outside the U.S., access code: 668095
To access the archived webcast:
Go to the Quarterly Webcasts section on the Investor Relations page at
http://www.amerisourcebergen.com.
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NEWS RELEASE
ABOUT AMERISOURCEBERGEN
AmerisourceBergen (NYSE:ABC) is the largest pharmaceutical services company in
the United States dedicated solely to the pharmaceutical supply chain. It is the
leading distributor of pharmaceutical products and services to the hospital
systems/acute care market, physician's offices, alternate care and mail order
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. For more
information go to www.amerisourcebergen.com.
FORWARD-LOOKING STATEMENTS
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. ACTUAL RESULTS MAY VARY MATERIALLY FROM THE EXPECTATIONS
CONTAINED IN THE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS MAY
INCLUDE STATEMENTS ADDRESSING FUTURE FINANCIAL AND OPERATING RESULTS OF
AMERISOURCEBERGEN AND THE BENEFITS AND ASPECTS OF THE 2001 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 REGULATORY 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 FOR FISCAL 2002.
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.
###
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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 %
2002 Revenue 2001 Revenue Change
------------ --------- ------------ --------- ------
Revenue:
Operating revenue $11,106,905 100.00% $ 9,686,276 100.00% 15%
Bulk deliveries to customer warehouses 1,327,628 1,382,504 -4%
----------- -----------
Total revenue 12,434,533 11,068,780
Cost of goods sold 11,913,108 10,597,347 12%
----------- -----------
Gross profit 521,425 4.69% 471,433 4.87% 11%
Operating expenses:
Distribution, selling and administrative 317,682 2.86% 297,592 3.07% 7%
Depreciation and amortization 17,269 0.16% 15,047 0.16% 15%
Facility consolidations and employee severance (1,381) -0.01% -- 0.00% N/A
Merger costs -- 0.00% 7,497 0.08% N/A
----------- -----------
Operating income 187,855 1.69% 151,297 1.56% 24%
Equity in losses of affiliates and other 183 0.00% 1,731 0.02% -89%
Interest expense 34,385 0.31% 36,993 0.38% -7%
----------- -----------
Income before taxes 153,287 1.38% 112,573 1.16% 36%
Income taxes 60,548 0.55% 44,690 0.46% 35%
----------- -----------
Net income $ 92,739 0.83% $ 67,883 0.70% 37%
=========== ===========
Earnings per share:
Basic $ 0.87 $ 0.65
Diluted $ 0.84 $ 0.63
Weighted average common shares outstanding:
Basic 106,790 103,736
Diluted 113,402 111,182
AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
ASSETS
December 31, September 30, $
2002 2002 Change
----------- ----------- -----------
Current assets:
Cash and cash equivalents $ 366,776 $ 663,340 ($ 296,564)
Accounts receivable, net 2,328,398 2,222,156 106,242
Merchandise inventories 6,381,477 5,437,878 943,599
Prepaid expenses and other 19,120 26,263 (7,143)
----------- ----------- -----------
Total current assets 9,095,771 8,349,637 746,134
Long-term assets 2,863,401 2,863,375 26
----------- ----------- -----------
Total assets $11,959,172 $11,213,012 $ 746,160
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,542,195 $ 5,367,837 $ 174,358
Current portion of long-term debt 60,932 60,819 113
Other current liabilities 752,215 670,861 81,354
----------- ----------- -----------
Total current liabilities 6,355,342 6,099,517 255,825
Long-term debt, less current portion 2,141,772 1,756,494 385,278
Other liabilities 42,034 40,663 1,371
Stockholders' equity 3,420,024 3,316,338 103,686
----------- ----------- -----------
Total liabilities and stockholders' equity $11,959,172 $11,213,012 $ 746,160
=========== =========== ===========
AMERISOURCEBERGEN CORPORATION
SUMMARY SEGMENT INFORMATION
(dollars in thousands)
(unaudited)
Three Months Ended December 31,
---------------------------------------------------------
Operating Revenue 2002 2001 % Change
- ------------------------------------- ---------------------------------------------------------
Pharmaceutical Distribution $10,899,570 $9,522,076 14%
PharMerica 402,842 355,415 13%
Intersegment Eliminations (195,507) (191,215) 2%
------------ -----------
Operating revenue $11,106,905 $9,686,276 15%
============ ===========
Three Months Ended December 31,
-----------------------------------------------------------
Operating Income 2002 2001 % Change
- ------------------------------------- -----------------------------------------------------------
Pharmaceutical Distribution $162,935 $139,484 17%
PharMerica 23,539 19,310 22%
Merger costs, facility consolidations and employee severance 1,381 (7,497) 118%
------------ ---------
Operating income $187,855 $151,297 24%
============ =========
Percentages of operating revenue:
Pharmaceutical Distribution
Gross profit 3.59% 3.70%
Operating expenses 2.10% 2.23%
Operating income 1.49% 1.46%
PharMerica
Gross profit 32.18% 33.62%
Operating expenses 26.33% 28.18%
Operating income 5.84% 5.43%
AmerisourceBergen Corporation
Gross profit 4.69% 4.87%
Operating expenses 3.00% 3.31%
Operating income 1.69% 1.56%
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
December 31,
2002 2001
-------- --------
Net income $ 92,739 $ 67,883
Interest expense - convertible subordinated notes, net of income taxes 2,489 2,481
-------- --------
Income available to common stockholders $ 95,228 $ 70,364
======== ========
Weighted average common shares outstanding - basic 106,790 103,736
Effect of dilutive securities:
Options to purchase common stock 948 1,782
Convertible subordinated notes 5,664 5,664
-------- --------
Weighted average common shares outstanding - diluted 113,402 111,182
======== ========
Earnings per share:
Basic $ 0.87 $ 0.65
Diluted $ 0.84 $ 0.63