AmerisourceBergen Reports Revenues of $52.5 Billion for the First Quarter, a 9.7 Percent Increase Year-Over-Year

AmerisourceBergen

VALLEY FORGE, PA — AmerisourceBergen Corporation (NYSE: ABC) has reported that in its fiscal year 2021 first quarter ended December 31, 2020, revenue increased 9.7 percent year-over-year to $52.5 billion. On the basis of U.S. generally accepted accounting principles (GAAP), diluted earnings per share (EPS) was $1.81 for the December quarter of fiscal 2021, compared to $0.90 in the prior year quarter. Adjusted diluted EPS, which is a non-GAAP measure that excludes items described below, increased 24 percent to $2.18 in the fiscal first quarter.

AmerisourceBergen is updating its outlook for fiscal year 2021. The Company does not provide forward-looking guidance on a GAAP basis, as discussed below in Fiscal Year 2021 Expectations. Adjusted diluted EPS guidance has been raised from the previous expectation of $8.25 to $8.50 to a range of $8.40 to $8.60, reflecting growth of 6 percent to 9 percent versus last fiscal year.

“AmerisourceBergen is driven by our purpose and we continue to leverage our scale and expertise to provide innovative solutions for our partners. Our strong performance in the December quarter and the improved outlook and financial guidance we are providing for fiscal year 2021 are the result of our continued ability to execute and the resilience of our businesses,” said Steven H. Collis, Chairman, President and Chief Executive Officer of AmerisourceBergen.

“As we move our business forward, we will continue to focus on execution excellence and supporting pharmaceutical innovation globally to enable positive outcomes by facilitating market access,” Mr. Collis continued. “Our ongoing focus on long-term, sustainable growth and our purpose of being united in our responsibility to create healthier futures position us well to create significant value for all our stakeholders.”

First Quarter Fiscal Year 2021 Summary Results

GAAP

Adjusted (Non-GAAP)

Revenue

$52.5B

$52.5B

Gross Profit

$1.5B

$1.4B

Operating Expenses

$905M

$810M

Operating Income

$547M

$617M

Interest Expense, Net

$34M

$34M

Effective Tax Rate

28.3%

22.0%

Net Income Attributable to ABC

$375M

$451M

Diluted Earnings Per Share

$1.81

$2.18

Diluted Shares Outstanding

207M

207M

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.

First Quarter GAAP Results

  • Revenue: In the first quarter of fiscal 2021, revenue was $52.5 billion, up 9.7 percent compared to the same quarter in the previous fiscal year, reflecting a 9.7 percent increase in Pharmaceutical Distribution Services revenue and an 11.1 percent increase in revenue within Other.
  • Gross Profit: Gross profit in the first quarter of fiscal 2021 was $1.5 billion, an 18.0 percent increase compared to the same period in the previous fiscal year. Gross profit was favorably impacted by the increase in gross profit in Pharmaceutical Distribution Services, a LIFO credit in the current year quarter in comparison to a LIFO expense in the prior year period, and an increase in gross profit in Other. Gross profit as a percentage of revenue was 2.77 percent, an increase of 20 basis points from the prior year quarter.
  • Operating Expenses: In the first quarter of fiscal 2021, operating expenses were $905.0 million, compared to $967.8 million in the same period last fiscal year. The decrease in operating expenses was primarily due to the $138.0 million impairment of PharMEDium assets recorded in the prior year quarter. This was partially offset by an increase in distribution, selling and administrative costs. Operating expenses as a percentage of revenue in the fiscal 2021 first quarter was 1.72 percent, compared to 2.02 percent for the same period in the previous fiscal year.
  • Operating Income: In the fiscal 2021 first quarter, operating income increased to $547.2 million from $263.4 million in the prior year quarter. Operating income as a percentage of revenue was 1.04 percent in the first quarter of fiscal 2021, compared to 0.55 percent for the same period in the previous fiscal year.
  • Interest Expense, Net: In the fiscal 2021 first quarter, net interest expense of $33.6 million was up 8.4 percent versus the prior year quarter due to a decrease in interest income resulting primarily from a decline in investment interest rates and was partially offset by a decrease in interest expense.
  • Effective Tax Rate: The effective tax rate was 28.3 percent for the first quarter of fiscal 2021 compared to 18.7 percent in the prior year quarter. The effective tax rate in the current quarter was higher primarily due to the impact of Swiss tax reform.
  • Diluted Earnings Per Share: Diluted earnings per share was $1.81 in the first quarter of fiscal 2021 compared to $0.90 in the previous fiscal year’s first quarter. The increase was driven by higher operating income and partially offset by the higher effective tax rate.
  • Diluted Shares Outstanding: Diluted weighted average shares outstanding for the first quarter of fiscal 2021 were 206.8 million, a 0.3 percent decline versus the prior fiscal year first quarter primarily due to share repurchases, net of stock option exercises and restricted stock vesting.

First Quarter Adjusted (non-GAAP) Results

  • Revenue: No adjustments were made to the GAAP presentation of revenue. In the first quarter of fiscal 2021, revenue was $52.5 billion, up 9.7 percent compared to the same quarter in the previous fiscal year, reflecting a 9.7 percent increase in Pharmaceutical Distribution Services revenue and an 11.1 percent increase in revenue within Other.
  • Adjusted Gross Profit: Adjusted gross profit in the fiscal 2021 first quarter was $1.4 billion, which was up 14.8 percent compared to the same period in the previous year due to increases in gross profit in Pharmaceutical Distribution Services and Other. Adjusted gross profit as a percentage of revenue was 2.72 percent in the fiscal 2021 first quarter, an increase of 12 basis points when compared to the prior year quarter due to an increase in specialty product sales.
  • Adjusted Operating Expenses: In the first quarter of fiscal 2021, adjusted operating expenses were $809.6 million, an increase of 8.3 percent compared to the same period in the previous fiscal year due to higher distribution, selling, and administrative expenses. Adjusted operating expenses as a percentage of revenue in the fiscal 2021 first quarter was 1.54%, a decrease of 2 basis points when compared to the prior year quarter.
  • Adjusted Operating Income: In the fiscal 2021 first quarter, adjusted operating income of $616.9 million increased 24.6 percent from the prior year period due to a 26.6 percent increase in Pharmaceutical Distribution Services’ operating income and a 16.4 percent increase in operating income within Other. Adjusted operating income as a percentage of revenue was 1.17 percent in the fiscal 2021 first quarter, an increase of 14 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 fiscal 2021 first quarter, net interest expense of $33.6 million was up 8.4 percent versus the prior year quarter due to a decrease in interest income resulting primarily from a decline in investment interest rates and was partially offset by a decrease in interest expense.
  • Adjusted Effective Tax Rate: The adjusted effective tax rate was 22.0 percent for the first quarter of fiscal 2021 compared to 21.0 percent in the prior year quarter.
  • Adjusted Diluted Earnings Per Share: Adjusted diluted earnings per share was up 23.9 percent to $2.18 in the first quarter of fiscal 2021 compared to $1.76 in the previous fiscal year’s first quarter, driven by the increase in adjusted operating income.
  • Diluted Shares Outstanding: No adjustments were made to the GAAP presentation of diluted shares outstanding. Diluted weighted average shares outstanding for the first quarter of fiscal 2021 were 206.8 million, a 0.3 percent decline versus the prior fiscal year first quarter primarily due to share repurchases, net of stock option exercises and restricted stock vesting.

Segment Discussion

The Company’s operations are comprised of the Pharmaceutical Distribution Services reportable segment and other operating segments that are not significant enough to require separate reportable segment disclosure and, therefore, have been included in Other for the purpose of the reportable segment presentation. Other consists of operating segments that focus on global commercialization services and animal health and includes AmerisourceBergen Consulting Services (ABCS), World Courier and MWI Animal Health (MWI).

Pharmaceutical Distribution Services Segment

Pharmaceutical Distribution Services revenue was $50.5 billion, an increase of 9.7 percent compared to the same quarter in the prior fiscal year primarily due to increased sales of specialty products, including COVID-19 treatments, and organic growth of some of its largest customers. Segment operating income of $496.1 million in the first quarter of fiscal 2021 was up 26.6 percent compared to the same period in the previous fiscal year, due to higher gross profit resulting from the growth in revenue.

Other

Revenue in Other was $2.1 billion in the first quarter of fiscal 2021, an increase of 11.1 percent compared to the same period in the prior fiscal year due to growth at all three operating segments: MWI, ABCS, and World Courier. Operating income in Other increased 16.4 percent to $121.6 million in the first quarter of fiscal 2021 due to the strong performance of MWI and World Courier.

Recent Company Highlights & Milestones

  • AmerisourceBergen and Walgreens Boots Alliance announced strategic agreements under which AmerisourceBergen will acquire the majority of Walgreens Boots Alliance’s Alliance Healthcare businesses for approximately $6.5 billion. This acquisition is subject to the satisfaction of customary closing conditions, including receipt of applicable regulatory approvals. In addition to this transaction, the two companies agreed to strengthen their strategic partnership by extending and expanding their commercial agreements.
  • Innomar Strategies, AmerisourceBergen’s Canadian operations business unit, reached an agreement with the Government of Canada to support the distribution of COVID-19 vaccines across Canada. As part of the agreement, Innomar is working with FedEx Express Canada to provide an end-to-end logistics solution that protects product viability throughout transport and enables safe and timely vaccine administration in each province and territory.
  • AmerisourceBergen reached an agreement with the U.S. Centers for Disease Control and Prevention (CDC) to include Good Neighbor Pharmacy and Elevate Provider Network members in the Federal Pharmacy Partnership Strategy for COVID-19 Vaccination. To support access, AmerisourceBergen will serve as a network administrator and place orders with the CDC on behalf of qualified and eligible Good Neighbor Pharmacy and Elevate Provider Network members.
  • AmerisourceBergen continues to play its key role as distributor of antivirals and antibody therapies used to treat hospitalized COVID-19 patients.
  • AmerisourceBergen continues its work with the Department of Health and Human Services to store, manage, and distribute pharmaceuticals for the Strategic National Stockpile.
  • AmerisourceBergen announced it reached another environmental sustainability milestone by earning a B on the 2020 CDP Climate Change Disclosure. The CDP assesses companies on the comprehensiveness of their disclosure, awareness and management of environmental risks and demonstration of best practices associated with environmental leadership.
  • AmerisourceBergen unveiled a new company brand, including a new logo, website and renewed design, all of which reflect the differentiated and innovative value the company brings to its customers, associates and global healthcare marketplace.

Fiscal Year 2021 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 2021 Expectations on an Adjusted (non-GAAP) Basis

AmerisourceBergen has updated its fiscal year 2021 financial guidance to reflect the Company’s continued strong performance and solid execution. This updated financial guidance does not include any contribution from the proposed Alliance Healthcare acquisition or any incremental growth from the expanded U.S. partnership announced in January 2021. The Company now expects:

  • Revenue growth in the high-single digit percent range, up from the mid-single digit percent range; and
  • Adjusted Diluted EPS to be in the range of $8.40 to $8.60, up from the previous range of $8.25 to $8.50.

Additional expectations now include:

  • Adjusted operating expense growth in the mid- to high-single digit percent range, widened from the mid-single digit percent range;
  • Adjusted operating income growth in the high-single digit percent range, up from the mid-single digit percent range;
    • Pharmaceutical Distribution Services segment operating income growth in the high-single digit percent range, up from the mid-single digit percent range;
    • Other, which is comprised of our Global Commercialization Services & Animal Health businesses, operating income growth in the mid- to high-single digit percent range, up from the mid-single digit percent range;
  • Weighted average shares to be approximately 207 million, narrowed from the previous expectation of between 206 and 207 million for the fiscal year.

All other previously communicated aspects of the Company’s fiscal year 2021 financial guidance and assumptions remain the same.

Dividend Declaration

The Company’s Board of Directors declared a quarterly cash dividend of $0.44 per common share, payable March 1, 2021, to stockholders of record at the close of business on February 12, 2021.

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