Revenue of $66.9 billion for the Third Quarter,
an 11.5 Percent Increase Year-Over-Year
Third Quarter GAAP Diluted EPS of $2.35 and
Adjusted Diluted EPS of $2.92
Adjusted Diluted EPS Guidance Range Raised to
$11.85 to $11.95 for Fiscal 2023
Company will begin operating as Cencora and
trading under the ticker symbol “COR,” effective August 30,
2023
AmerisourceBergen Corporation (NYSE: ABC) today reported that in
its fiscal year 2023 third quarter ended June 30, 2023, revenue
increased 11.5 percent year-over-year to $66.9 billion. On the
basis of U.S. generally accepted accounting principles (GAAP),
diluted earnings per share (EPS) was $2.35 for the third quarter of
fiscal 2023 compared to $1.92 in the prior year third quarter.
Adjusted diluted EPS, which is a non-GAAP financial measure that
excludes items described below, increased 11.5 percent to $2.92 in
the fiscal third quarter from $2.62 in the prior year third
quarter.
AmerisourceBergen is updating its outlook for fiscal year 2023.
The Company does not provide forward-looking guidance on a GAAP
basis, as discussed below in Fiscal Year 2023 Expectations.
Adjusted diluted EPS guidance has been raised from the previous
range of $11.70 to $11.90 to a range of $11.85 to $11.95.
“In our third quarter, AmerisourceBergen continued our strong
performance as our business and balance sheet have driven our
growth while enabling thoughtful, strategic investments to advance
our business like our recently completed investment in
OneOncology,” said Steven H. Collis, Chairman, President &
Chief Executive Officer of AmerisourceBergen.
“Over the last two decades AmerisourceBergen has been at the
center of the healthcare ecosystem with a legacy of execution
excellence and commitment to delivering innovative solutions,” Mr.
Collis continued. “As we become Cencora later this month, we look
forward to uniting our purpose-driven team members under our
globally inclusive identity as we continue to deliver on our
purpose and drive long-term value creation for all our
stakeholders.”
Third Quarter Fiscal Year 2023 Summary
Results
GAAP
Adjusted (Non-GAAP)
Revenue
$66.9B
$66.9B
Gross Profit
$2.3B
$2.2B
Operating Expenses
$1.6B
$1.4B
Operating Income
$670M
$822M
Interest Expense, Net
$58M
$58M
Effective Tax Rate
21.3%
21.5%
Net Income Attributable to
AmerisourceBergen Corporation
$480M
$596M
Diluted Earnings Per Share
$2.35
$2.92
Diluted Shares Outstanding
204.4M
204.4M
Below, AmerisourceBergen presents descriptive summaries of the
Company’s GAAP and adjusted (non-GAAP) quarterly results. In the
tables that follow, GAAP results and GAAP to non-GAAP
reconciliations are presented. For more information related to
non-GAAP financial measures, including adjustments made in the
periods presented, please refer to the “Supplemental Information
Regarding Non-GAAP Financial Measures” following the tables.
Third Quarter GAAP
Results
- Revenue: In the third quarter of
fiscal 2023, revenue was $66.9 billion, up 11.5 percent compared to
the same quarter in the previous fiscal year, reflecting a 12.2
percent increase in revenue within U.S. Healthcare Solutions and a
5.6 percent increase in revenue within International Healthcare
Solutions.
- Gross Profit: Gross profit in the
third quarter of fiscal 2023 was $2.3 billion, a 12.4 percent
increase compared to the same period in the previous fiscal year,
primarily due to increases in gross profit in both reportable
segments and gains from antitrust litigation settlements. Gross
profit as a percentage of revenue was 3.38 percent, an increase of
2 basis points from the prior year quarter.
- Operating Expenses: In the third
quarter of fiscal 2023, operating expenses were $1.6 billion, a 4.3
percent increase compared to the same period in the previous fiscal
year, primarily driven by increases in distribution, selling, and
administrative expenses, amortization expense, and restructuring
and other expenses compared to the prior year quarter, offset in
part by the receipt of $83.4 million from the H.D. Smith opioid
litigation indemnity escrow in the current year quarter and a
goodwill impairment related to the Company’s less-than-wholly-owned
subsidiary in Brazil in the prior year quarter.
- Operating Income: In the third
quarter of fiscal 2023, operating income was $670.1 million, a 37.5
percent increase compared to the same period in the previous fiscal
year due to the increase in gross profit, offset in part by the
increase in operating expenses. Operating income as a percentage of
revenue was 1.00 percent in the third quarter of fiscal 2023, an
increase of 19 basis points when compared to the prior year
quarter.
- Interest Expense, Net: In the
third quarter of fiscal 2023, net interest expense of $57.9 million
increased 9.5 percent versus the prior year quarter primarily due
to increases in variable-rate borrowings and associated interest
rates, offset in part by an increase in interest income as a result
of higher investment interest rates.
- Effective Tax Rate: The effective
tax rate was 21.3 percent for the third quarter of fiscal 2023,
reflecting the mix of the Company’s domestic and international
income. This compares to 23.7 percent in the prior year quarter,
which included discrete tax expenses.
- Diluted Earnings Per Share:
Diluted earnings per share was $2.35 in the third quarter of fiscal
2023, a 22.4 percent increase compared to $1.92 in the previous
fiscal year’s third quarter.
- Diluted Shares Outstanding:
Diluted weighted average shares outstanding for the third quarter
of fiscal 2023 were 204.4 million, a decrease of 7.4 million
shares, or 3.5 percent, versus the prior fiscal year third quarter
primarily as a result of share repurchases.
Third Quarter Adjusted (non-GAAP)
Results
- Revenue: No adjustments were made
to the GAAP presentation of revenue. In the third quarter of fiscal
2023, revenue was $66.9 billion, up 11.5 percent compared to the
same quarter in the previous fiscal year, reflecting a 12.2 percent
increase in revenue within U.S. Healthcare Solutions and a 5.6
percent increase in revenue within International Healthcare
Solutions. On a constant currency basis, revenue was up 12.2
percent, reflecting 12.4 percent constant currency growth in
International Healthcare Solutions revenue.
- Adjusted Gross Profit: Adjusted
gross profit in the third quarter of fiscal 2023 was $2.2 billion,
an 8.0 percent increase compared to the same period in the previous
fiscal year due to increases in gross profit in both reportable
segments. Adjusted gross profit as a percentage of revenue was 3.33
percent in the fiscal 2023 third quarter, a decrease of 11 basis
points from the prior year quarter, due to the decline in the U.S.
Healthcare Solutions gross profit margin related to lower sales of
COVID-19 treatments and increased sales of products labeled for
diabetes and/or weight loss in the GLP-1 class, which have lower
profit margins.
- Adjusted Operating Expenses: In
the third quarter of fiscal 2023, adjusted operating expenses were
$1.4 billion, a 7.6 percent increase compared to the same period in
the prior fiscal year, driven by an increase in distribution,
selling, and administrative expenses.
- Adjusted Operating Income: In the
third quarter of fiscal 2023, adjusted operating income was $822.3
million, an 8.7 percent increase compared to the same period in the
prior fiscal year, driven by a 9.5 percent increase in U.S.
Healthcare Solutions and a 6.2 percent increase in International
Healthcare Solutions. On a constant currency basis, the Company’s
adjusted operating income increased 9.0 percent compared to the
prior year quarter. On a constant currency basis, International
Healthcare Solutions segment operating income increased 7.3
percent. Adjusted operating income as a percentage of revenue was
1.23 percent in the fiscal 2023 third quarter, a decrease of 3
basis points when compared to the prior year quarter.
- Interest Expense, Net: No
adjustments were made to the GAAP presentation of net interest
expense. In the third quarter of fiscal 2023, net interest expense
of $57.9 million increased 9.5 percent versus the prior year
quarter primarily due to increases in variable-rate borrowings and
associated interest rates, offset in part by an increase in
interest income as a result of higher investment interest
rates.
- Adjusted Effective Tax Rate: The
adjusted effective tax rate was 21.5 percent for the third quarter
of fiscal 2023 compared to 20.2 percent in the prior year
quarter.
- Adjusted Diluted Earnings Per
Share: Adjusted diluted earnings per share was $2.92 in the
third quarter of fiscal 2023, an 11.5 percent increase compared to
$2.62 in the previous fiscal year’s third quarter. On a constant
currency basis, adjusted diluted earnings per share increased 11.1
percent compared to the prior year quarter.
- Diluted Shares Outstanding: No
adjustments were made to the GAAP presentation of diluted shares
outstanding. Diluted weighted average shares outstanding for the
third quarter of fiscal 2023 were 204.4 million, a decrease of 7.4
million shares, or 3.5 percent, versus the prior fiscal year third
quarter primarily as a result of share repurchases.
Segment Discussion
The Company is organized geographically based upon the products
and services it provides to its customers under two reportable
segments: U.S. Healthcare Solutions and International Healthcare
Solutions.
U.S. Healthcare Solutions
U.S. Healthcare Solutions revenue was $59.9 billion in the third
quarter of fiscal 2023, an increase of 12.2 percent compared to the
same quarter in the prior fiscal year due to overall market growth
primarily driven by unit volume growth, including increased sales
of products labeled for diabetes and/or weight loss in the GLP-1
class, which have lower profit margins, and increased sales of
specialty products to physician practices and health systems,
offset in part by a decrease in sales of COVID-19 treatments.
Segment operating income of $635.2 million in the third quarter of
fiscal 2023 was up 9.5 percent compared to the same period in the
previous fiscal year as a result of an increase in gross
profit.
International Healthcare
Solutions
Revenue in International Healthcare Solutions was $7.0 billion
in the third quarter of fiscal 2023, an increase of 5.6 percent
from the previous fiscal year’s third quarter due to increased
revenue across our businesses, offset in part by the divestiture of
our Brazilian specialty business in the prior year period. Segment
operating income in the third quarter of fiscal 2023 was $187.1
million, an increase of 6.2 percent, primarily due to growth at our
global specialty logistics business and the January 2023
acquisition of PharmaLex. On a constant currency basis,
International Healthcare Solutions revenue and operating income
increased by 12.4 percent and 7.3 percent, respectively.
Recent Company Highlights &
Milestones
- AmerisourceBergen and TPG closed their acquisition of
OneOncology, a network of leading oncology practices.
AmerisourceBergen’s minority investment will allow it to further
deepen its relationship with community oncologists and expand on
its solutions in specialty.
- AmerisourceBergen will change its name to Cencora, Inc. and
begin trading under the ticker symbol “COR” on the New York Stock
Exchange on August 30, 2023. The new name reflects its bold vision
and purpose-driven approach to creating healthier futures. The new
name represents a unified presence that will continue to fuel the
company’s ongoing growth strategy and advance its impact across
healthcare.
- AmerisourceBergen was named a “Best Place to Work for
Disability Inclusion” after receiving a perfect score on the
Disability Equality Index. The Disability Equality Index is a joint
initiative of Disability:IN and the American Association of People
with Disabilities that measures disability inclusion.
- AmerisourceBergen was included on Forbes’ first-ever Net Zero
Leaders list, which highlights the 100 U.S. public companies that
are best positioning themselves to reduce their greenhouse-gas
emissions and integrating climate resilience into business models
and practices.
- AmerisourceBergen was named to USA Today’s inaugural list of
America’s Climate Leaders, a data-driven recognition of companies
that cut their carbon footprint in recent years.
- AmerisourceBergen was recognized by the Civic 50 of Greater
Philadelphia for its efforts to drive social impact in its
community.
- Good Neighbor Pharmacy, AmerisourceBergen’s national
independent pharmacy network, announced that it was ranked “First
in Customer Satisfaction with Chain Drug Store Pharmacies” in the
J.D. Power 2022 U.S. Pharmacy Study. This marks the twelfth time
that Good Neighbor Pharmacy has earned the achievement in the last
14 years and the network's seventh consecutive win.
Fiscal Year 2023
Expectations
The Company does not provide forward-looking guidance on a GAAP
basis as certain financial information, the probable significance
of which cannot be determined, is not available or cannot be
reasonably estimated. Please refer to the Supplemental Information
Regarding Non-GAAP Financial Measures following the tables for
additional information.
Fiscal Year 2023 Expectations on an
Adjusted (non-GAAP) Basis
AmerisourceBergen is now updating its fiscal year 2023 financial
guidance to primarily reflect its strong performance to date and
updated foreign currency translation rates. The Company now
expects:
- Revenue growth to be at least 8 percent, up from the previous
range of 6 to 8 percent;
- U.S. Healthcare Solutions revenue growth to be at least 9
percent, up from the previous range of 7 to 8 percent;
- International Healthcare Solutions revenue growth to be in the
range of 1 to 4 percent, up from the previous range of a 3 percent
decline to flat;
- Adjusted Diluted Earnings Per Share to be in the range of
$11.85 to $11.95, representing growth of 7 to 8 percent, raised
from the previous range of $11.70 to $11.90;
- On a constant currency basis, adjusted diluted earnings per
share growth to be in the range of 9 to 10 percent, from the
previous range of 8 to 10 percent;
- Excluding contributions related to COVID-19, adjusted diluted
earnings per share growth to be in the range of 12 to 13 percent,
from the previous range of 11 to 13 percent; and
- On a constant currency basis excluding contributions related to
COVID-19, adjusted diluted earnings per share growth to be in the
range of 13 to 14 percent, from the previous range of 13 to 15
percent.
Additional expectations now include:
- Adjusted consolidated operating income growth to be in the
range of 3 to 4 percent, from the previous range of 2 to 4 percent.
Excluding contributions related to COVID-19, adjusted consolidated
operating income growth to be in the range of 6 to 7 percent, from
the previous range of 5 to 7 percent;
- U.S. Healthcare Solutions segment operating income growth to be
in the range of 4 to 5 percent, from the previous range of 3 to 5
percent. Expectations for segment operating income growth excluding
COVID-19 contributions to be in the range of 7 to 8 percent, from
the previous range of 6 to 8 percent;
- International Healthcare Solutions segment operating income
growth to be in the range of 0 to 4 percent, up from the previous
range of a 3 percent decline to 1 percent growth;
- Adjusted free cash flow to be at least $2 billion, from the
previous guidance of approximately $2 billion; and
- For additional details regarding updated guidance expectations
on a constant currency, ex-COVID-19 contribution and ex-M&A and
divestiture basis, please refer to our slide presentation for
investors.
All other previously communicated aspects of the Company’s
fiscal year 2023 consolidated financial guidance and assumptions
remain the same.
Dividend Declaration
The Company’s Board of Directors declared a quarterly cash
dividend of $0.485 per common share, payable August 28, 2023, to
stockholders of record at the close of business on August 11,
2023.
Name Change
On January 24, 2023, the Company announced its intent to change
its name to better reflect its bold vision and purpose-driven
approach to creating healthier futures. Effective August 30, 2023,
the Company will begin operating as Cencora and will begin trading
on the New York Stock Exchange under the ticker symbol “COR”. The
new name represents a unified presence that will continue to fuel
the Company’s ongoing growth strategy and advance its impact across
the healthcare industry.
Conference Call & Slide
Presentation.
The Company will host a conference call to discuss the results
at 8:30 a.m. ET on August 2, 2023. A slide presentation for
investors has also been posted on the Company’s website at
investor.amerisourcebergen.com. Participating in the conference
call will be:
- Steven H. Collis, Chairman, President & Chief Executive
Officer
- James F. Cleary, Executive Vice President & Chief Financial
Officer
The dial-in number for the live call will be (833) 470-1428.
From outside the United States and Canada, dial +1 (404) 975-4839.
The access code for the call will be 742015. The live call will
also be webcast via the Company’s website at
investor.amerisourcebergen.com. Users are encouraged to log on to
the webcast approximately 10 minutes in advance of the scheduled
start time of the call.
Replays of the call will be made available via telephone and
webcast. A replay of the webcast will be posted on
investor.amerisourcebergen.com approximately one hour after the
completion of the call and will remain available for one year. The
telephone replay will also be available approximately one hour
after the completion of the call and will remain available for
seven days. To access the telephone replay from within the U.S. and
Canada, dial (866) 813-9403. From outside the United States and
Canada, dial +44 (204) 525-0658. The access code for the replay is
498053.
Upcoming Investor Events
AmerisourceBergen management will be attending the following
investor events in the coming months:
- Morgan Stanley Global Healthcare Conference, September 11,
2023; and
- Baird Healthcare Conference, September 12, 2023
Please check the website for updates regarding the timing of the
live presentation webcasts, if any, and for replay information.
About AmerisourceBergen
AmerisourceBergen is a leading global pharmaceutical solutions
organization centered on improving the lives of people and animals
around the world. We partner with pharmaceutical innovators across
the value chain to facilitate and optimize market access to
therapies. Care providers depend on us for the secure, reliable
delivery of pharmaceuticals, healthcare products, and solutions.
Our 46,000+ worldwide team members contribute to positive health
outcomes through the power of our purpose: We are united in our
responsibility to create healthier futures. AmerisourceBergen is
ranked #11 on the Fortune 500 and #21 on the Global Fortune 500
with more than $200 billion in annual revenue. Learn more at
investor.amerisourcebergen.com.
AmerisourceBergen’s Cautionary Note Regarding Forward-Looking
Statements
Certain of the statements contained in this press release are
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Securities
Exchange Act”). Words such as “aim,” “anticipate,” “believe,”
“can,” “continue,” “could,” “estimate,” "expect," “intend,” “may,”
“might,” “on track,” “opportunity,” “plan,” “possible,”
“potential,” “predict,” “project,” “seek,” “should,” “strive,”
“sustain,” “synergy,” “target,” “will,” “would” and similar
expressions are intended to identify forward-looking statements,
but the absence of these words does not mean that a statement is
not forward-looking. These statements are based on management’s
current expectations and are subject to uncertainty and changes in
circumstances and speak only as of the date hereof. These
statements are not guarantees of future performance and are based
on assumptions and estimates that could prove incorrect or could
cause actual results to vary materially from those indicated. Among
the factors that could cause actual results to differ materially
from those projected, anticipated, or implied are the
following:
- the effect of and uncertainties related to the ongoing COVID-19
pandemic (including any government responses thereto) and any
continued recovery from the impact of the COVID-19 pandemic;
- our ability to achieve and maintain profitability in the
future;
- our ability to respond to general economic conditions,
including elevated levels of inflation;
- our ability to manage our growth effectively and our
expectations regarding the development and expansion of our
business;
- the impact on our business of the regulatory environment and
complexities with compliance;
- unfavorable trends in brand and generic pharmaceutical pricing,
including in rate or frequency of price inflation or
deflation;
- competition and industry consolidation of both customers and
suppliers resulting in increasing pressure to reduce prices for our
products and services;
- changes in the United States healthcare and regulatory
environment, including changes that could impact prescription drug
reimbursement under Medicare and Medicaid and declining
reimbursement rates for pharmaceuticals;
- increasing governmental regulations regarding the
pharmaceutical supply channel;
- continued federal and state government enforcement initiatives
to detect and prevent suspicious orders of controlled substances
and the diversion of controlled substances;
- continued prosecution or suit by federal and state governmental
entities and other parties (including third-party payors,
hospitals, hospital groups and individuals) of alleged violations
of laws and regulations regarding controlled substances, and any
related disputes, including shareholder derivative lawsuits;
- increased federal scrutiny and litigation, including qui tam
litigation, for alleged violations of laws and regulations
governing the marketing, sale, purchase and/or dispensing of
pharmaceutical products or services, and associated reserves and
costs;
- failure to comply with the Corporate Integrity Agreement;
- the outcome of any legal or governmental proceedings that may
be instituted against us, including material adverse resolution of
pending legal proceedings;
- the retention of key customer or supplier relationships under
less favorable economics or the adverse resolution of any contract
or other dispute with customers or suppliers;
- changes to customer or supplier payment terms, including as a
result of the COVID-19 impact on such payment terms;
- unexpected costs, charges or expenses resulting from the
acquisitions of PharmaLex and OneOncology;
- the integration of the Alliance Healthcare and PharmaLex
businesses into the Company being more difficult, time consuming or
costly than expected;
- the Company’s, Alliance Healthcare’s, PharmaLex’s or
OneOncology’s failure to achieve expected or targeted future
financial and operating performance and results;
- the effects of disruption from acquisitions and related
strategic transactions on the respective businesses of the Company,
Alliance Healthcare, PharmaLex and OneOncology, and the fact that
acquisitions and related strategic transactions may make it more
difficult to establish or maintain relationships with employees,
suppliers and other business partners;
- the acquisition of businesses, including the acquisitions of
the Alliance Healthcare, PharmaLex and OneOncology businesses and
related strategic transactions, that do not perform as expected, or
that are difficult to integrate or control, or the inability to
capture all of the anticipated synergies related thereto or to
capture the anticipated synergies within the expected time
period;
- risks associated with the strategic, long-term relationship
between Walgreens Boots Alliance, Inc. and the Company, including
with respect to the pharmaceutical distribution agreement and/or
the global generic purchasing services arrangement;
- managing foreign expansion, including non-compliance with the
U.S. Foreign Corrupt Practices Act, anti-bribery laws, economic
sanctions and import laws and regulations;
- our ability to respond to financial market volatility and
disruption;
- changes in tax laws or legislative initiatives that could
adversely affect the Company’s tax positions and/or the Company’s
tax liabilities or adverse resolution of challenges to the
Company’s tax positions;
- the loss, bankruptcy or insolvency of a major supplier, or
substantial defaults in payment, material reduction in purchases by
or the loss, bankruptcy or insolvency of a major customer,
including as a result of COVID-19;
- financial and other impacts of COVID-19 on our operations or
business continuity;
- changes to the customer or supplier mix;
- malfunction, failure or breach of sophisticated information
systems to operate as designed, and risks generally associated with
cybersecurity;
- risks generally associated with data privacy regulation and the
protection and international transfer of personal data;
- regulatory and legal implications relating to the March 2023
cybersecurity event sustained by one of the Company’s foreign
business units in one country;
- financial and other impacts of macroeconomic and geopolitical
trends and events, including the situation in Russia and Ukraine
and its regional and global ramifications;
- natural disasters or other unexpected events, such as
additional pandemics, that affect the Company’s operations;
- the impairment of goodwill or other intangible assets
(including any additional impairments with respect to foreign
operations), resulting in a charge to earnings;
- the Company’s ability to manage and complete divestitures;
- the disruption of the Company’s cash flow and ability to return
value to its stockholders in accordance with its past
practices;
- interest rate and foreign currency exchange rate
fluctuations;
- declining economic conditions and increases in inflation in the
United States and abroad; and
- other economic, business, competitive, legal, tax, regulatory
and/or operational factors affecting the Company’s business
generally.
Certain additional factors that management believes could cause
actual outcomes and results to differ materially from those
described in forward-looking statements are set forth (i) in Item
1A (Risk Factors), in the Company’s Annual Report on Form 10-K for
the fiscal year ended September 30, 2022 and elsewhere in that
report as supplemented by the description of business risks
described in Item IA to our Form 10-Q for the fiscal quarter ended
March 31, 2023, to which reference is made herein and (ii) in other
reports filed by the Company pursuant to the Securities Exchange
Act. The Company undertakes no obligation to publicly update or
revise any forward-looking statements, except as required by the
federal securities laws.
AMERISOURCEBERGEN CORPORATION FINANCIAL SUMMARY
(in thousands, except per share data) (unaudited)
Three Months
Ended
June 30, 2023
% of
Revenue
Three Months
Ended
June 30, 2022
% of
Revenue
%
Change
Revenue
$
66,947,043
$
60,064,601
11.5
%
Cost of goods sold
64,682,397
58,049,232
11.4
%
Gross profit 1
2,264,646
3.38
%
2,015,369
3.36
%
12.4
%
Operating expenses:
Distribution, selling, and
administrative
1,304,141
1.95
%
1,212,152
2.02
%
7.6
%
Depreciation and amortization
274,272
0.41
%
172,114
0.29
%
59.4
%
Litigation and opioid-related (credit)
expenses 2
(67,102
)
23,442
Acquisition-related deal and integration
expenses
19,283
36,570
Restructuring and other expenses
63,924
7,858
Goodwill impairment 3
—
75,936
Total operating expenses
1,594,518
2.38
%
1,528,072
2.54
%
4.3
%
Operating income
670,128
1.00
%
487,297
0.81
%
37.5
%
Other loss (income), net 4
3,436
(41,888
)
Interest expense, net
57,864
52,862
9.5
%
Income before income taxes
608,828
0.91
%
476,323
0.79
%
27.8
%
Income tax expense
129,615
113,120
Net income
479,213
0.72
%
363,203
0.60
%
31.9
%
Net loss attributable to noncontrolling
interests
368
43,761
Net income attributable to
AmerisourceBergen Corporation
$
479,581
0.72
%
$
406,964
0.68
%
17.8
%
Earnings per share:
Basic
$
2.37
$
1.95
21.5
%
Diluted
$
2.35
$
1.92
22.4
%
Weighted average common shares
outstanding:
Basic
202,349
208,885
(3.1
)%
Diluted
204,375
211,738
(3.5
)%
________________________________________
1
Includes a $118.6 million gain
from antitrust litigation settlements, Turkey foreign currency
remeasurement expense of $50.6 million, and a $35.0 million LIFO
expense in the three months ended June 30, 2023. Includes Turkey
foreign currency remeasurement expense of $27.6 million and a $23.1
million LIFO expense in the three months ended June 30, 2022.
2
Includes the receipt of $83.4
million from the H.D. Smith opioid litigation indemnity escrow in
the three months ended June 30, 2023.
3
The goodwill impairment is
related to the Company's less-than-wholly-owned subsidiary in
Brazil in the three months ended June 30, 2022.
4
Includes a $60.0 million gain on
the sale of non-core businesses in the three months ended June 30,
2022.
AMERISOURCEBERGEN CORPORATION FINANCIAL SUMMARY
(in thousands, except per share data) (unaudited)
Nine Months Ended
June 30, 2023
% of
Revenue
Nine Months Ended
June 30, 2022
% of
Revenue
%
Change
Revenue
$
193,251,080
$
177,412,857
8.9
%
Cost of goods sold
186,545,039
171,102,049
9.0
%
Gross profit 1
6,706,041
3.47
%
6,310,808
3.56
%
6.3
%
Operating expenses:
Distribution, selling, and
administrative
3,916,156
2.03
%
3,585,500
2.02
%
9.2
%
Depreciation and amortization
687,678
0.36
%
523,333
0.29
%
31.4
%
Litigation and opioid-related (credit)
expenses 2
(38,583
)
108,167
Acquisition-related deal and integration
expenses
99,392
69,710
Restructuring and other expenses
177,608
31,357
Impairment of assets
—
4,946
Goodwill impairment 3
—
75,936
Total operating expenses
4,842,251
2.51
%
4,398,949
2.48
%
10.1
%
Operating income
1,863,790
0.96
%
1,911,859
1.08
%
(2.5
)%
Other income, net 4
(18,612
)
(48,008
)
Interest expense, net
167,989
159,150
5.6
%
Income before income taxes
1,714,413
0.89
%
1,800,717
1.01
%
(4.8
)%
Income tax expense
330,817
432,853
Net income
1,383,596
0.72
%
1,367,864
0.77
%
1.2
%
Net loss attributable to noncontrolling
interests
11,132
36,219
Net income attributable to
AmerisourceBergen Corporation
$
1,394,728
0.72
%
$
1,404,083
0.79
%
(0.7
)%
Earnings per share:
Basic
$
6.87
$
6.72
2.2
%
Diluted
$
6.80
$
6.63
2.6
%
Weighted average common shares
outstanding:
Basic
202,908
208,895
(2.9
)%
Diluted
204,995
211,633
(3.1
)%
________________________________________
1
Includes a $168.5 million gain
from antitrust litigation settlements, a $114.3 million LIFO
expense, and Turkey foreign currency remeasurement expense of $59.0
million in the nine months ended June 30, 2023. Includes a $37.7
million LIFO credit and Turkey foreign currency remeasurement
expense of $27.6 million in the nine months ended June 30,
2022.
2
Includes the receipt of $83.4
million from the H.D. Smith opioid litigation indemnity escrow in
the nine months ended June 30, 2023.
3
The goodwill impairment is
related to the Company's less-than-wholly-owned subsidiary in
Brazil in the nine months ended June 30, 2022.
4
Includes a $60.0 million gain on
the sale of non-core businesses in the nine months ended June 30,
2022.
AMERISOURCEBERGEN CORPORATION GAAP TO NON-GAAP
RECONCILIATIONS (in thousands, except per share data)
(unaudited)
Three Months Ended June 30,
2023
Gross Profit
Operating
Expenses
Operating
Income
Income
Before
Income Taxes
Income Tax
Expense
Net Loss
(Income)
Attributable to
Noncontrolling
Interests
Net Income
Attributable
to ABC
Diluted
Earnings
Per Share
GAAP
$
2,264,646
$
1,594,518
$
670,128
$
608,828
$
129,615
$
368
$
479,581
$
2.35
Gains from antitrust litigation
settlements
(118,611
)
—
(118,611
)
(118,611
)
(27,518
)
—
(91,093
)
(0.45
)
LIFO expense
34,952
—
34,952
34,952
8,037
—
26,915
0.13
Turkey highly inflationary impact
50,580
—
50,580
57,581
—
—
57,581
0.28
Acquisition-related intangibles
amortization
—
(169,154
)
169,154
169,154
39,087
(969
)
129,098
0.63
Litigation and opioid-related credit, net
1
—
67,102
(67,102
)
(67,102
)
3,750
—
(70,852
)
(0.35
)
Acquisition-related deal and integration
expenses
—
(19,283
)
19,283
19,283
4,393
—
14,890
0.07
Restructuring and other expenses
—
(63,924
)
63,924
63,924
14,733
—
49,191
0.24
Recovery of non-customer note
receivable
—
—
—
(3,000
)
—
—
(3,000
)
(0.01
)
Tax reform 2
—
—
—
(4,823
)
(8,748
)
—
3,925
0.02
Adjusted Non-GAAP
$
2,231,567
$
1,409,259
$
822,308
$
760,186
$
163,349
$
(601
)
$
596,236
$
2.92
3
Adjusted Non-GAAP % change vs. prior
year
8.0
%
7.6
%
8.7
%
8.6
%
15.5
%
7.5
%
11.5
%
Percentages of Revenue:
GAAP
Adjusted
Non-GAAP
Gross profit
3.38%
3.33%
Operating expenses
2.38%
2.11%
Operating income
1.00%
1.23%
________________________________________
1
Includes the receipt of $83.4
million from the H.D. Smith opioid litigation indemnity escrow.
2
Includes tax expense relating to
2020 Swiss tax reform and a gain on the currency remeasurement of
the related deferred tax assets, the latter of which is recorded
within Other Loss (Income), Net.
3
The sum of the components does
not equal the total due to rounding.
Note: For more information
related to non-GAAP financial measures, refer to the section titled
“Supplemental Information Regarding Non-GAAP Financial Measures” of
this release.
AMERISOURCEBERGEN CORPORATION GAAP TO NON-GAAP
RECONCILIATIONS (in thousands, except per share data)
(unaudited)
Three Months Ended June 30,
2022
Gross Profit
Operating
Expenses
Operating
Income
Income Before
Income Taxes
Income Tax
Expense
Net Loss
(Income)
Attributable to
Noncontrolling
Interests
Net Income
Attributable
to ABC
Diluted
Earnings
Per Share
GAAP
$
2,015,369
$
1,528,072
$
487,297
$
476,323
$
113,120
$
43,761
$
406,964
$
1.92
Gains from antitrust litigation
settlements
—
—
—
—
(60
)
—
60
—
LIFO expense
23,070
—
23,070
23,070
4,142
—
18,928
0.09
Turkey highly inflationary impact
27,618
—
27,618
33,423
—
—
33,423
0.16
Acquisition-related intangibles
amortization
—
(74,408
)
74,408
74,408
24,894
(538
)
48,976
0.23
Litigation and opioid-related expenses
—
(23,442
)
23,442
23,442
7,795
—
15,647
0.07
Acquisition-related deal and integration
expenses
—
(36,570
)
36,570
36,570
10,791
—
25,779
0.12
Restructuring and other expenses
—
(7,858
)
7,858
7,858
2,853
—
5,005
0.02
Goodwill impairment
—
(75,936
)
75,936
75,936
—
(47,004
)
28,932
0.14
Gain on sale of businesses
—
—
—
(59,973
)
(13,193
)
—
(46,780
)
(0.22
)
Tax reform 1
—
—
—
8,886
(8,954
)
—
17,840
0.08
Adjusted Non-GAAP
$
2,066,057
$
1,309,858
$
756,199
$
699,943
$
141,388
$
(3,781
)
$
554,774
$
2.62
2
Percentages of Revenue:
GAAP
Adjusted
Non-GAAP
Gross profit
3.36%
3.44%
Operating expenses
2.54%
2.18%
Operating income
0.81%
1.26%
________________________________________
1
Includes tax expense relating to
2020 Swiss tax reform and a loss on the currency remeasurement of
the related deferred tax assets, which is recorded within Other
Loss (Income), Net.
2
The sum of the components does
not equal the total due to rounding.
Note: For more information
related to non-GAAP financial measures, refer to the section titled
“Supplemental Information Regarding Non-GAAP Financial Measures” of
this release.
AMERISOURCEBERGEN CORPORATION GAAP TO NON-GAAP
RECONCILIATIONS (in thousands, except per share data)
(unaudited)
Nine Months Ended June 30,
2023
Gross Profit
Operating
Expenses
Operating
Income
Income
Before
Income Taxes
Income Tax
Expense
Net Loss
Attributable to
Noncontrolling
Interests
Net Income
Attributable
to ABC
Diluted
Earnings
Per Share
GAAP
$
6,706,041
$
4,842,251
$
1,863,790
$
1,714,413
$
330,817
$
11,132
$
1,394,728
$
6.80
Gains from antitrust litigation
settlements
(168,510
)
—
(168,510
)
(168,510
)
(39,175
)
—
(129,335
)
(0.63
)
LIFO expense
114,272
—
114,272
114,272
26,566
—
87,706
0.43
Turkey highly inflationary impact
59,019
—
59,019
66,022
—
—
66,022
0.32
Acquisition-related intangibles
amortization
—
(381,146
)
381,146
381,146
88,609
(3,111
)
289,426
1.41
Litigation and opioid-related credit, net
1
—
38,583
(38,583
)
(38,583
)
10,412
—
(48,995
)
(0.24
)
Acquisition-related deal and integration
expenses
—
(99,392
)
99,392
99,392
23,107
—
76,285
0.37
Restructuring and other expenses
—
(177,608
)
177,608
177,608
41,290
—
136,318
0.66
Foreign currency gain
—
—
—
(5,663
)
—
—
(5,663
)
(0.03
)
Recovery of non-customer note
receivable
—
—
—
(4,148
)
—
—
(4,148
)
(0.02
)
Tax reform 2
—
—
—
(11,462
)
(20,356
)
—
8,894
0.04
Adjusted Non-GAAP
$
6,710,822
$
4,222,688
$
2,488,134
$
2,324,487
$
461,270
$
8,021
$
1,871,238
$
9.13
3
Adjusted Non-GAAP % change vs. prior
year
6.5
%
8.9
%
2.7
%
2.7
%
(2.2
)%
4.9
%
8.3
%
Percentages of Revenue:
GAAP
Adjusted
Non-GAAP
Gross profit
3.47%
3.47%
Operating expenses
2.51%
2.19%
Operating income
0.96%
1.29%
________________________________________
1
Includes the receipt of $83.4
million from the H.D. Smith opioid litigation indemnity escrow.
2
Tax expense relating to 2020
Swiss tax reform and a gain on the currency remeasurement of the
related deferred tax assets, the latter of which is recorded within
Other Income, Net.
3
The sum of the components does
not equal the total due to rounding.
Note: For more information
related to non-GAAP financial measures, refer to the section titled
“Supplemental Information Regarding Non-GAAP Financial Measures” of
this release.
AMERISOURCEBERGEN CORPORATION GAAP TO NON-GAAP
RECONCILIATIONS (in thousands, except per share data)
(unaudited)
Nine Months Ended June 30,
2022
Gross Profit
Operating
Expenses
Operating
Income
Income Before
Income Taxes
Income Tax
Expense
Net Loss
(Income)
Attributable to
Noncontrolling
Interests
Net Income
Attributable
to ABC
Diluted
Earnings
Per Share
GAAP
$
6,310,808
$
4,398,949
$
1,911,859
$
1,800,717
$
432,853
$
36,219
$
1,404,083
$
6.63
Gains from antitrust litigation
settlements
(1,835
)
—
(1,835
)
(1,835
)
(487
)
—
(1,348
)
(0.01
)
LIFO credit
(37,668
)
—
(37,668
)
(37,668
)
(10,000
)
—
(27,668
)
(0.13
)
Turkey highly inflationary impact
27,618
—
27,618
33,423
—
—
33,423
0.16
Acquisition-related intangibles
amortization
—
(231,866
)
231,866
231,866
61,555
(4,092
)
166,219
0.79
Litigation and opioid-related expenses
—
(108,167
)
108,167
108,167
19,005
—
89,162
0.42
Acquisition-related deal and integration
expenses
—
(69,710
)
69,710
69,710
18,507
—
51,203
0.24
Restructuring and other expenses
—
(31,357
)
31,357
31,357
8,324
—
23,033
0.11
Goodwill impairment
—
(75,936
)
75,936
75,936
—
(47,004
)
28,932
0.14
Impairment of assets
—
(4,946
)
4,946
4,946
—
—
4,946
0.02
Gain on sale of businesses
—
—
—
(59,973
)
(13,193
)
—
(46,780
)
(0.22
)
Certain discrete tax expense
—
—
—
—
(18,979
)
6,840
25,819
0.12
Tax reform 1
—
—
—
6,316
(26,158
)
—
32,474
0.15
Adjusted Non-GAAP
$
6,298,923
$
3,876,967
$
2,421,956
$
2,262,962
$
471,427
$
(8,037
)
$
1,783,498
$
8.43
2
Percentages of Revenue:
GAAP
Adjusted
Non-GAAP
Gross profit
3.56%
3.55%
Operating expenses
2.48%
2.19%
Operating income
1.08%
1.37%
________________________________________
1
Includes tax expense relating to
2020 Swiss tax reform and a loss on the currency remeasurement of
the related deferred tax assets, which is recorded within Other
Income, Net.
2
The sum of the components does
not equal the total due to rounding.
Note: For more information
related to non-GAAP financial measures, refer to the section titled
“Supplemental Information Regarding Non-GAAP Financial Measures” of
this release.
AMERISOURCEBERGEN CORPORATION SUMMARY SEGMENT
INFORMATION (in thousands) (unaudited)
Three Months Ended June
30,
Revenue
2023
2022
% Change
U.S. Healthcare Solutions
$
59,900,199
$
53,389,345
12.2
%
International Healthcare Solutions
7,047,777
6,676,726
5.6
%
Intersegment eliminations
(933
)
(1,470
)
Revenue
$
66,947,043
$
60,064,601
11.5
%
Three Months Ended June
30,
Operating income
2023
2022
% Change
U.S. Healthcare Solutions
$
635,176
$
579,927
9.5
%
International Healthcare Solutions
187,132
176,272
6.2
%
Total segment operating income
822,308
756,199
8.7
%
Gains from antitrust litigation
settlements
118,611
—
LIFO expense
(34,952
)
(23,070
)
Turkey highly inflationary impact
(50,580
)
(27,618
)
Acquisition-related intangibles
amortization
(169,154
)
(74,408
)
Litigation and opioid-related credit
(expenses)
67,102
(23,442
)
Acquisition-related deal and integration
expenses
(19,283
)
(36,570
)
Restructuring and other expenses
(63,924
)
(7,858
)
Goodwill impairment
—
(75,936
)
Operating income
$
670,128
$
487,297
37.5
%
Percentages of Revenue:
U.S. Healthcare Solutions
Gross profit
2.36
%
2.49
%
Operating expenses
1.29
%
1.40
%
Operating income
1.06
%
1.09
%
International Healthcare Solutions
Gross profit
11.65
%
11.05
%
Operating expenses
8.99
%
8.41
%
Operating income
2.66
%
2.64
%
AmerisourceBergen Corporation (GAAP)
Gross profit
3.38
%
3.36
%
Operating expenses
2.38
%
2.54
%
Operating income
1.00
%
0.81
%
AmerisourceBergen Corporation
(Non-GAAP)
Adjusted gross profit
3.33
%
3.44
%
Adjusted operating expenses
2.11
%
2.18
%
Adjusted operating income
1.23
%
1.26
%
Note: For more information related to non-GAAP financial
measures, refer to the section titled “Supplemental Information
Regarding Non-GAAP Financial Measures” of this release.
AMERISOURCEBERGEN CORPORATION SUMMARY SEGMENT
INFORMATION (in thousands) (unaudited)
Nine Months Ended June
30,
Revenue
2023
2022
% Change
U.S. Healthcare Solutions
$
172,830,234
$
157,311,755
9.9
%
International Healthcare Solutions
20,423,990
20,104,199
1.6
%
Intersegment eliminations
(3,144
)
(3,097
)
Revenue
$
193,251,080
$
177,412,857
8.9
%
Nine Months Ended June
30,
Operating income
2023
2022
% Change
U.S. Healthcare Solutions
$
1,963,729
$
1,878,556
4.5
%
International Healthcare Solutions
524,405
543,400
(3.5
)%
Total segment operating income
2,488,134
2,421,956
2.7
%
Gains from antitrust litigation
settlements
168,510
1,835
LIFO (expense) credit
(114,272
)
37,668
Turkey highly inflationary impact
(59,019
)
(27,618
)
Acquisition-related intangibles
amortization
(381,146
)
(231,866
)
Litigation and opioid-related credit
(expenses)
38,583
(108,167
)
Acquisition-related deal and integration
expenses
(99,392
)
(69,710
)
Restructuring and other expenses
(177,608
)
(31,357
)
Goodwill impairment
—
(75,936
)
Impairment of assets
—
(4,946
)
Operating income
$
1,863,790
$
1,911,859
(2.5
)%
Percentages of Revenue:
U.S. Healthcare Solutions
Gross profit
2.52
%
2.59
%
Operating expenses
1.38
%
1.39
%
Operating income
1.14
%
1.19
%
International Healthcare Solutions
Gross profit
11.57
%
11.09
%
Operating expenses
9.00
%
8.39
%
Operating income
2.57
%
2.70
%
AmerisourceBergen Corporation (GAAP)
Gross profit
3.47
%
3.56
%
Operating expenses
2.51
%
2.48
%
Operating income
0.96
%
1.08
%
AmerisourceBergen Corporation
(Non-GAAP)
Adjusted gross profit
3.47
%
3.55
%
Adjusted operating expenses
2.19
%
2.19
%
Adjusted operating income
1.29
%
1.37
%
Note: For more information related to non-GAAP financial
measures, refer to the section titled “Supplemental Information
Regarding Non-GAAP Financial Measures” of this release.
AMERISOURCEBERGEN CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)
June 30,
September 30,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
1,389,345
$
3,388,189
Accounts receivable, net
20,796,648
18,452,675
Inventories
16,852,340
15,556,394
Right to recover assets
1,417,551
1,532,061
Prepaid expenses and other
530,700
660,439
Total current assets
40,986,584
39,589,758
Property and equipment, net
2,147,881
2,135,003
Goodwill and other intangible assets
14,425,265
12,836,623
Deferred income taxes
221,235
237,571
Other long-term assets
3,396,231
1,761,661
Total assets
$
61,177,196
$
56,560,616
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
43,752,080
$
40,192,890
Accrued expenses and other
2,170,270
2,214,592
Short-term debt
860,861
1,070,473
Total current liabilities
46,783,211
43,477,955
Long-term debt
4,159,853
4,632,360
Accrued income taxes
284,020
320,274
Deferred income taxes
1,716,360
1,620,413
Accrued litigation liability
5,455,000
5,461,758
Other long-term liabilities
1,856,708
976,583
Total equity
922,044
71,273
Total liabilities and stockholders’
equity
$
61,177,196
$
56,560,616
AMERISOURCEBERGEN CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
(unaudited)
Nine Months Ended June
30,
2023
2022
Operating Activities:
Net income
$
1,383,596
$
1,367,864
Adjustments to reconcile net income to net
cash provided by operating activities
899,803
704,628
Changes in operating assets and
liabilities, excluding the effects of acquisitions and
divestitures:
Accounts receivable
(2,249,881
)
(1,550,962
)
Inventories
(1,369,977
)
(712,849
)
Accounts payable
3,513,686
2,074,612
Other, net
(92,704
)
(344,675
)
Net cash provided by operating
activities
2,084,523
1,538,618
Investing Activities:
Capital expenditures
(282,862
)
(322,732
)
Cost of acquired companies, net of cash
acquired 1
(1,409,681
)
(124,158
)
Cost of equity investments 2
(737,025
)
—
Proceeds from the sale of businesses
—
258,082
Other, net
10,544
(4,899
)
Net cash used in investing activities
(2,419,024
)
(193,707
)
Financing Activities:
Net debt repayments
(581,557
)
(576,303
)
Purchases of common stock 3
(907,214
)
(248,422
)
Exercises of stock options
50,078
83,954
Cash dividends on common stock
(300,413
)
(295,239
)
Employee tax withholdings related to
restricted share vesting
(71,059
)
(35,273
)
Other, net
(5,099
)
(8,036
)
Net cash used in financing activities
(1,815,264
)
(1,079,319
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
104,479
(33,056
)
(Decrease) increase in cash, cash
equivalents, and restricted cash, including cash classified within
assets held for sale
(2,045,286
)
232,536
Less: Increase in cash classified within
assets held for sale
—
(610
)
(Decrease) increase in cash, cash
equivalents, and restricted cash
(2,045,286
)
231,926
Cash, cash equivalents, and restricted
cash at beginning of period 4
3,593,539
3,070,128
Cash, cash equivalents, and restricted
cash at end of period 4
$
1,548,253
$
3,302,054
________________________________________
1
Includes $1,406.3 million for the
acquisition of PharmaLex.
2
Includes a $718.4 million
investment in OneOncology.
3
Includes $28.4 million of
purchases in September 2022 that cash settled in October 2022.
4
The following represents a
reconciliation of cash and cash equivalents in the Condensed
Consolidated Balance Sheets to cash, cash equivalents, and
restricted cash used in the Condensed Consolidated Statements of
Cash Flows:
June 30,
2023
September 30,
2022
June 30,
2022
September 30,
2021
Cash and cash equivalents
$
1,389,345
$
3,388,189
$
3,034,233
$
2,547,142
Restricted cash (included in Prepaid
Expenses and Other)
96,623
144,980
207,722
462,986
Restricted cash (included in Other
Long-Term Assets)
62,285
60,370
60,099
60,000
Cash, cash equivalents, and restricted
cash
$
1,548,253
$
3,593,539
$
3,302,054
$
3,070,128
SUPPLEMENTAL INFORMATION REGARDING
NON-GAAP FINANCIAL MEASURES
To supplement the financial measures prepared in accordance with
U.S. generally accepted accounting principles (GAAP), the Company
uses the non-GAAP financial measures described below. The non-GAAP
financial measures should be viewed in addition to, and not in lieu
of, financial measures calculated in accordance with GAAP. These
supplemental measures may vary from, and may not be comparable to,
similarly titled measures by other companies.
The non-GAAP financial measures are presented because management
uses non-GAAP financial measures to evaluate the Company’s
operating performance, to perform financial planning, and to
determine incentive compensation. Therefore, the Company believes
that the presentation of non-GAAP financial measures provides
useful supplementary information to, and facilitates additional
analysis by, investors. The presented non-GAAP financial measures
exclude items that management does not believe reflect the
Company’s core operating performance because such items are outside
the control of the Company or are inherently unusual,
non-operating, unpredictable, non-recurring, or non-cash. We have
included the following non-GAAP earnings-related financial measures
in this release:
- Adjusted gross profit and adjusted gross profit margin:
Adjusted gross profit is a non-GAAP financial measure that excludes
gains from antitrust litigation settlements, Turkey highly
inflationary impact, and LIFO expense (credit). Adjusted gross
profit margin is the ratio of adjusted gross profit to total
revenue. Management believes that these non-GAAP financial measures
are useful to investors as a supplemental measure of the Company’s
ongoing operating performance. Gains from antitrust litigation
settlements, Turkey highly inflationary impact, and LIFO expense
(credit) are excluded because the Company cannot control the
amounts recognized or timing of these items. Gains from antitrust
litigation settlements relate to the settlement of lawsuits that
have been filed against brand pharmaceutical manufacturers alleging
that the manufacturer, by itself or in concert with others, took
improper actions to delay or prevent generic drugs from entering
the market. LIFO expense (credit) is affected by changes in
inventory quantities, product mix, and manufacturer pricing
practices, which may be impacted by market and other external
influences.
- Adjusted operating expenses and adjusted operating expense
margin: Adjusted operating expenses is a non-GAAP financial measure
that excludes acquisition-related intangibles amortization;
litigation and opioid-related expenses (credit);
acquisition-related deal and integration expenses; restructuring
and other expenses; impairment of assets; and goodwill impairment.
Adjusted operating expense margin is the ratio of adjusted
operating expenses to total revenue. Acquisition-related
intangibles amortization is excluded because it is a non-cash item
and does not reflect the operating performance of the acquired
companies. We exclude acquisition-related deal and integration
expenses and restructuring and other expenses that relate to
unpredictable and/or non-recurring business activities. We exclude
the amount of litigation and opioid-related expenses (credit), and
the impairment of assets, including goodwill, that are unusual,
non-operating, unpredictable, non-recurring or non-cash in nature
because we believe these exclusions facilitate the analysis of our
ongoing operational performance.
- Adjusted operating income and adjusted operating income margin:
Adjusted operating income is a non-GAAP financial measure that
excludes the same items that are described above and excluded from
adjusted gross profit and adjusted operating expenses. Adjusted
operating income margin is the ratio of adjusted operating income
to total revenue. Management believes that these non-GAAP financial
measures are useful to investors as a supplemental way to evaluate
the Company’s performance because the adjustments are unusual,
non-operating, unpredictable, non-recurring or non-cash in
nature.
- Adjusted income before income taxes: Adjusted income before
income taxes is a non-GAAP financial measure that excludes the same
items that are described above and excluded from adjusted operating
income. In addition, the recovery of a non-customer note
receivable, a foreign currency gain, the gain (loss) on the
currency remeasurement of the deferred tax asset relating to 2020
Swiss tax reform, and the gain on the sale of businesses are
excluded from adjusted income before income taxes because these
amounts are unusual, non-operating, and non-recurring. Management
believes that this non-GAAP financial measure is useful to
investors because it facilitates the calculation of the Company’s
adjusted effective tax rate.
- Adjusted effective tax rate: Adjusted effective tax rate is a
non-GAAP financial measure that is determined by dividing adjusted
income tax expense by adjusted income before income taxes.
Management believes that this non-GAAP financial measure is useful
to investors because it presents an effective tax rate that does
not reflect unusual, non-operating, unpredictable, non-recurring,
or non-cash amounts or items that are outside the control of the
Company.
- Adjusted income tax expense: Adjusted income tax expense is a
non-GAAP financial measure that excludes the income tax expense
associated with the same items that are described above and
excluded from adjusted income before income taxes. Certain discrete
tax expense (benefits) primarily attributable to foreign valuation
allowance adjustments for the nine months ended June 30, 2022 are
also excluded from adjusted income tax expense. Further, certain
expenses relating to 2020 Swiss tax reform are excluded from
adjusted income tax expense for the nine months ended June 30, 2023
and 2022. Management believes that this non-GAAP financial measure
is useful to investors as a supplemental way to evaluate the
Company’s performance because the adjustments are unusual,
non-operating, unpredictable, non-recurring or non-cash in
nature.
- Adjusted net income/loss attributable to noncontrolling
interests: Adjusted net income/loss attributable to noncontrolling
interests excludes the non-controlling interest portion of the same
items described above. Management believes that this non-GAAP
financial measure is useful to investors because it facilitates the
calculation of adjusted net income attributable to the
Company.
- Adjusted net income attributable to the Company: Adjusted net
income attributable to the Company is a non-GAAP financial measure
that excludes the same items that are described above. Management
believes that this non-GAAP financial measure is useful to
investors as a supplemental way to evaluate the Company’s
performance because the adjustments are unusual, non-operating,
unpredictable, non-recurring or non-cash in nature.
- Adjusted diluted earnings per share: Adjusted diluted earnings
per share excludes the per share impact of adjustments including
gains from antitrust litigation settlements; Turkey highly
inflationary impact; LIFO expense (credit); acquisition-related
intangibles amortization; litigation and opioid-related expenses
(credit); acquisition-related deal and integration expenses;
restructuring and other expenses; recovery of a non-customer note
receivable; a foreign currency gain; impairment of assets,
including goodwill; the gain on the sale of businesses; and the
gain (loss) on the currency remeasurement related to 2020 Swiss tax
reform, in each case net of the tax effect calculated using the
applicable effective tax rate for those items. In addition, the per
share impact of certain discrete tax expense primarily attributable
to foreign valuation allowance adjustments for the nine months
ended June 30, 2022, and the per share impact of certain expenses
relating to 2020 Swiss tax reform for the nine months ended June
30, 2023 and 2022 are also excluded from adjusted diluted earnings
per share. Management believes that this non-GAAP financial measure
is useful to investors because it eliminates the per share impact
of the items that are outside the control of the Company or that we
consider to not be indicative of our ongoing operating performance
due to their inherent unusual, non-operating, unpredictable,
non-recurring, or non-cash nature.
- Adjusted Free Cash Flow: Adjusted free cash flow is a non-GAAP
financial measure defined as net cash provided by operating
activities, excluding significant unpredictable or non-recurring
cash payments or receipts relating to legal settlements, minus
capital expenditures. Adjusted free cash flow is used internally by
management for measuring operating cash flow generation and setting
performance targets and has historically been used as one of the
means of providing guidance on possible future cash flows. The
Company does not provide forward looking guidance on a GAAP basis
for free cash flow because the timing and amount of favorable and
unfavorable settlements excluded from this metric, the probable
significance of which cannot be determined, are unavailable and
cannot be reasonably estimated.
The Company also presents certain information related to current
period operating results in “constant currency,” which is a
non-GAAP financial measure. These amounts are calculated by
translating current period results at the foreign currency exchange
rates used in the comparable period in the prior year. The Company
presents such constant currency financial information because it
has significant operations outside of the United States reporting
in currencies other than the U.S. dollar and this presentation
provides a framework to assess how its business performed excluding
the impact of foreign currency exchange rate fluctuations. For the
third quarter of fiscal 2023, (i) revenue of $66.9 billion was
negatively impacted by foreign currency translation of $457
million, resulting in revenue on a constant currency basis of $67.4
billion, and (ii) operating income of $822 million was negatively
impacted by foreign currency translation of $2 million, resulting
in operating income on a constant currency basis of $824 million.
For the third quarter of fiscal 2023 in the International
Healthcare Solutions segment, (i) revenue of $7.0 billion was
negatively impacted by foreign currency translation of $457
million, resulting in revenue on a constant currency basis of $7.5
billion, and (ii) operating income of $187 million was negatively
impacted by foreign currency translation of $2 million, resulting
in operating income on a constant currency basis of $189
million.
In addition, the Company has provided non-GAAP fiscal year 2023
guidance for diluted earnings per share, operating income,
effective income tax rate, and free cash flows that excludes the
same or similar items as those that are excluded from the
historical non-GAAP financial measures, as well as significant
items that are outside the control of the Company or inherently
unusual, non-operating, unpredictable, non-recurring or non-cash in
nature. The Company does not provide forward looking guidance on a
GAAP basis for such metrics because certain financial information,
the probable significance of which cannot be determined, is not
available and cannot be reasonably estimated. For example, LIFO
expense (credit) is largely dependent upon the future inflation or
deflation of brand and generic pharmaceuticals, which is out of the
Company’s control, and acquisition-related intangibles amortization
depends on the timing and amount of future acquisitions, which
cannot be reasonably estimated. Similarly, the timing and amount of
favorable and unfavorable settlements, the probable significance of
which cannot be determined, are unavailable and cannot be
reasonably estimated.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230801147213/en/
Bennett S. Murphy Senior Vice President, Head of
Investor Relations and Treasury 610-727-3693
bmurphy@amerisourcebergen.com
AmerisourceBergen (NYSE:ABC)
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AmerisourceBergen (NYSE:ABC)
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