AmerisourceBergen Reports Record Revenue and $0.42 in Diluted EPS from Continuing Operations for the June Quarter

VALLEY FORGE, Pa.--(Business Wire)--
AmerisourceBergen Corporation (NYSE:ABC) today reported that in its fiscal year
2009 third quarter ended June 30, 2009, diluted earnings per share from
continuing operations were $0.42, a 20 percent increase, and revenue increased
2.2 percent to a record $18.4 billion. Earnings per share reflect the Company`s
June 2009 two-for-one stock split.

Fiscal Third Quarter Highlights

* Diluted earnings per share from continuing operations of $0.42, a 20 percent
increase.
* Record revenue of $18.4 billion, up 2.2 percent.
* Gross profit of $519.2 million, up 4 percent.
* Operating margin of 1.16 percent, up 6 basis points.
* Cash flows from operations of $398.0 million.
* Share repurchases of $93.9 million.

Fiscal First Nine Months Highlights

* Diluted earnings per share from continuing operations of $1.25, a 16 percent
increase.
* Revenue of $53.0 billion, flat.
* Gross profit of $1.6 billion, up 3 percent.
* Operating margin of 1.24 percent, up 6 basis points.
* Cash flows from operations of $430.5 million.
* Share repurchases of $273.8 million.

"Our outstanding results in the June quarter were driven by strong generic drug
sales, up more than 20 percent due to new customers and continued market
penetration; good performance under our fee-for-service contracts with
manufacturers; and very disciplined working capital management," said R. David
Yost, AmerisourceBergen`s President and Chief Executive Officer. "Record revenue
in the quarter was up 2.2 percent, and would have increased 6 percent when
adjusted for the negative impact of the July 1, 2008 loss of the
direct-to-warehouse business of a large retail drug chain. Our average
receivable days were again down in the quarter; our balance sheet remains
strong; and we have good financial flexibility."

"During the quarter, we also acquired Innomar Strategies Inc., which when
combined with our AmerisourceBergen Specialty Group, Canada, gives us the
largest and broadest commercialization service offerings to pharmaceutical and
biotechnology manufacturers in Canada," he continued. "Given our strong position
in generics and specialty pharmaceuticals and our good momentum coming out of
this quarter, we are well positioned for the future."

Summary of Quarterly Results

* Revenue: In the third quarter of fiscal 2009, revenue was a record $18.4
billion, up 2.2 percent compared to the same quarter in the previous fiscal
year, reflecting a 2 percent increase in AmerisourceBergen Drug Corporation
revenue, which was driven primarily by new business, and a 6 percent increase in
AmerisourceBergen Specialty Group revenue.
* Gross Profit: Gross profit in the fiscal 2009 third quarter was $519.2
million, a 4 percent increase over the same period in the previous year driven
by strong generic sales and an increased contribution from fee-for-service
agreements. In the previous fiscal year`s third quarter, gross profit was
negatively impacted by an $8.4 million inventory write down of certain pharmacy
dispensing equipment. The LIFO charge in the fiscal 2009 third quarter was $4.1
million compared with a $5.0 million charge in the previous year`s third
quarter. Gross profit as a percentage of revenue increased 5 basis points to
2.82 percent in the fiscal 2009 third quarter.
* Operating Expenses: For the third quarter of fiscal 2009, operating expenses
were $306.2 million compared with $300.5 million in the prior fiscal year`s
third quarter. The increase in operating expenses was primarily due to an $8.9
million non-cash intangible asset impairment at U.S. Bioservices, a unit of
AmerisourceBergen Specialty Group. Operating expenses as a percentage of revenue
in the fiscal 2009 third quarter were 1.66 percent compared with 1.67 percent in
the same period in the previous fiscal year, reflecting continued cost
discipline.
* Operating Income: In the fiscal 2009 third quarter, operating income increased
8 percent to $213.0 million, due primarily to the increase in gross profit.
Operating income in the quarter was negatively impacted by the asset impairment
mentioned above. Facility consolidations, employee severance and other charges
were $0.2 million in the quarter compared to $7.9 million in the same quarter of
the previous fiscal year. Operating income as a percentage of revenue increased
6 basis points to 1.16 percent in the fiscal 2009 third quarter compared with
the previous year`s third quarter.
* Tax Rate: The effective tax rate for the third quarter of fiscal 2009 was 36.8
percent, down from 37.6 percent in the previous fiscal year`s third quarter. The
Company continues to expect an on-going annualized effective tax rate of
approximately 38.4 percent, but closer to 38 percent for fiscal year 2009.
* Income from Continuing Operations: In the fiscal 2009 third quarter, income
from continuing operations was $125.1 million, up 11 percent over the same
period in the previous fiscal year and exceeding the operating income growth of
8 percent due to a lower effective tax rate and lower interest expense.
* Shares Outstanding: Diluted average shares outstanding for the third quarter
of fiscal year 2009 were 300.6 million, down 7 percent from the previous fiscal
year`s third quarter due primarily to share repurchases, net of option
exercises. The Company completed a two-for-one stock split and announced a 20
percent dividend increase in June 2009.
* Earnings Per Share: Diluted earnings per share from continuing operations were
up 20 percent to $0.42 in the third quarter of fiscal 2009 compared to $0.35 in
the previous fiscal year`s third quarter, reflecting the 11 percent growth in
income from continuing operations and the reduction in diluted average shares
outstanding.

Summary of First Nine Months

* In the first nine months of fiscal 2009, diluted earnings per share from
continuing operations were $1.25, up 16 percent over the same nine-month period
in the prior fiscal year. Revenue in the period was $53.0 billion, unchanged in
relation to the same comparative period, and up approximately 4.0 percent when
adjusted for the negative impact of the loss of the direct-to-warehouse business
of a large retail drug chain. Operating expense dollars in the nine-month
period, excluding the intangible asset impairment charges, were lower compared
to the same period in the previous fiscal year. Operating income rose 5 percent
to $659.1 million in the first nine months of fiscal 2009, which included $5.5
million of special charges compared to $9.4 million in the same year-ago period.
In the fiscal 2009 first nine months, gross margin increased 7 basis points to
2.94 percent and operating margin increased 6 basis points to 1.24 percent, both
compared to the previous fiscal year`s same period. Diluted average shares
outstanding for the nine-month period in fiscal 2009 were 305.2 million, down 7
percent from the year-ago same period.

Fiscal Year 2009 Expectations At Higher End of Range

"Looking ahead, the Company expects diluted earnings per share from continuing
operations for fiscal year 2009 to be at the higher end of our previously stated
range of $1.59 to $1.65, an increase of 10 percent to 15 percent over the
split-adjusted $1.44 in fiscal year 2008," said R. David Yost, AmerisourceBergen
President and Chief Executive Officer. "The fiscal year range implies a fourth
quarter fiscal year 2009 range of $0.34 to $0.40, and again we would expect to
be at the higher end of this range."

Yost said, "Remaining unchanged are the following assumptions supporting the
fiscal 2009 diluted earnings per share from continuing operations range: revenue
growth of between 1 percent and 3 percent; operating margin expansion in the low
to mid single digit basis point range; and free cash flow in the range of $460
million to $535 million, which includes capital expenditures in the $140 million
range. Also unchanged is the expected repurchase of approximately $350 million
of AmerisourceBergen common shares in fiscal 2009."

Conference Call

The Company will host a conference call to discuss its results at 11:00 a.m.
Eastern Time on July 30, 2009. Participating in the conference call will be: R.
David Yost, President and Chief Executive Officer and Michael D. DiCandilo,
Executive Vice President and Chief Financial Officer.

To access the live conference call via telephone:

Dial in: (651) 291-0900, 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 1:00 p.m. July
30, 2009 until 11:59 p.m. August 6, 2009. 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: 106662
(320) 365-3844 from outside the U.S., access code: 106662

To access the archived webcast:

Go to the Quarterly Webcasts section on the Investor Relations page at
http://www.amerisourcebergen.com.

About AmerisourceBergen

AmerisourceBergen is one of the world's largest pharmaceutical services
companies serving the United States, 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 reimbursement and pharmaceutical consulting
services. With more than $70 billion in annual revenue, AmerisourceBergen is
headquartered in Valley Forge, PA, and employs approximately 10,000 people.
AmerisourceBergen is ranked #26 on the Fortune 500 list. For more information,
go to www.amerisourcebergen.com.

Forward-Looking Statements

This news release contains forward-looking statements about AmerisourceBergen`s
future business and financial performance, estimates and prospects. 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. The following
factors, among others, could cause actual results to differ materially from
those described in any forward-looking statements: changes in pharmaceutical
market growth rates; the loss of one or more key customer or supplier
relationships; changes in customer mix; customer delinquencies, defaults or
insolvencies; supplier defaults or insolvencies; changes in pharmaceutical
manufacturers` pricing and distribution policies or practices; adverse
resolution of any contract or other dispute with customers or suppliers; federal
and state government enforcement initiatives to detect and prevent suspicious
orders of controlled substances and the diversion of controlled substances;
changes in U.S. legislation or regulatory action affecting pharmaceutical
product pricing or reimbursement policies, including under Medicaid and
Medicare; changes in regulatory or clinical medical guidelines and/or labeling
for the pharmaceuticals we distribute, including certain anemia products; price
inflation in branded pharmaceuticals and price deflation in generics;
significant breakdown or interruption of our information technology systems; our
inability to implement an enterprise resource planning (ERP) system to handle
business and financial processes within AmerisourceBergen Drug Corporation`s
operations and our corporate functions without operating problems and/or cost
overruns; success of integration, restructuring or systems initiatives; interest
rate and foreign currency exchange rate fluctuations; economic, business,
competitive and/or regulatory developments in Canada, the United Kingdom and
elsewhere outside of the United States, including potential changes in Canadian
provincial legislation or regulatory action to lower pharmaceutical product
pricing and service fees; the impact of divestitures or the acquisition of
businesses that do not perform as we expect or that are difficult for us to
integrate or control; our inability to successfully complete any other
transaction that we may wish to pursue from time to time; changes in tax
legislation or adverse resolution of challenges to our tax positions; increased
costs of maintaining, or reductions in our ability to maintain, adequate
liquidity and financing sources; continued volatility, and further deterioration
of the capital and credit markets; and other economic, business, competitive,
legal, tax, regulatory and/or operational factors affecting our business
generally.Our most recent annual report on Form 10-K, quarterly reports on Forms
10-Q and current reports 8-K (which we may revise or supplement in future
reports filed to the SEC) provide additional information about these risks,
uncertainties and other matters. We do not undertake to update our
forward-looking statements.

AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)

Three Three
Months Ended % of Months Ended % of
June 30, Total June 30, Total %
2009 Revenue 2008 Revenue Change

Revenue:
Operating revenue $17,964,847 $17,507,497 2.6 %
Bulk deliveries to customer warehouses 429,052 489,169 -12.3 %
Total revenue 18,393,899 100.00 % 17,996,666 100.00 % 2.2 %

Cost of goods sold 17,874,676 17,498,621 2.1 %

Gross profit 519,223 2.82 % 498,045 2.77 % 4.3 %

Operating expenses:
Distribution, selling and administrative 277,434 1.51 % 271,098 1.51 % 2.3 %
Depreciation and amortization 19,689 0.11 % 21,557 0.12 % -8.7 %
Facility consolidations, employee severance and other 213 - % 7,865 0.04 % N/M
Intangible asset impairment 8,900 0.05 % - - % N/M

Operating income 212,987 1.16 % 197,525 1.10 % 7.8 %

Other loss 186 - % 768 - % N/M

Interest expense, net 14,652 0.08 % 15,966 0.09 % -8.2 %

Income from continuing operations before income taxes 198,149 1.08 % 180,791 1.00 % 9.6 %

Income taxes 73,015 0.40 % 68,026 0.38 % 7.3 %

Income from continuing operations 125,134 0.68 % 112,765 0.63 % 11.0 %

Loss from discontinued operations, net of tax (6,327 ) (220,785 )

Net income (loss) $118,807 $(108,020 )

Basic earnings (loss) per share:
Continuing operations $0.42 $0.35 20.0 %
Discontinued operations (0.02 ) (0.69 )
Total $0.40 $(0.34 )

Diluted earnings (loss) per share:
Continuing operations $0.42 $0.35 20.0 %
Discontinued operations (0.02 ) (0.69 )
Total $0.40 $(0.34 )

Weighted average common shares outstanding:
Basic 298,477 319,064
Diluted (1) 300,592 322,234

(1) Includes the dilutive effect of stock options, restricted stock, and restricted stock units.

AMERISOURCEBERGEN CORPORATION
FINANCIAL SUMMARY
(In thousands, except per share data)
(unaudited)

Nine Nine
Months Ended % of Months Ended % of
June 30, Total June 30, Total %
2009 Revenue 2008 Revenue Change

Revenue:
Operating revenue $51,778,715 $50,857,011 1.8 %
Bulk deliveries to customer warehouses 1,265,212 2,174,876 -41.8 %
Total revenue 53,043,927 100.00 % 53,031,887 100.00 % - %

Cost of goods sold 51,482,385 51,512,338 -0.1 %

Gross profit 1,561,542 2.94 % 1,519,549 2.87 % 2.8 %

Operating expenses:
Distribution, selling and administrative 828,669 1.56 % 821,404 1.55 % 0.9 %
Depreciation and amortization 58,032 0.11 % 63,550 0.12 % -8.7 %
Facility consolidations, employee severance and other 5,504 0.01 % 9,426 0.02 % N/M
Intangible asset impairments 10,200 0.02 % - - % N/M

Operating income 659,137 1.24 % 625,169 1.18 % 5.4 %

Other loss 1,119 - % 513 - % N/M

Interest expense, net 43,356 0.08 % 51,081 0.10 % -15.1 %

Income from continuing operations before income taxes 614,662 1.16 % 573,575 1.08 % 7.2 %

Income taxes 232,957 0.44 % 219,573 0.41 % 6.1 %

Income from continuing operations 381,705 0.72 % 354,002 0.67 % 7.8 %

Loss from discontinued operations, net of tax (8,455 ) (218,350 )

Net income $373,250 $135,652

Basic earnings (loss) per share:
Continuing operations $1.26 $1.09 15.6 %
Discontinued operations (0.03 ) (0.67 )
Total $1.23 $0.42

Diluted earnings (loss) per share:
Continuing operations $1.25 $1.08 15.7 %
Discontinued operations (0.03 ) (0.67 )
Total $1.22 $0.41

Weighted average common shares outstanding:
Basic 303,225 324,094
Diluted (1) 305,171 327,954

(1) Includes the dilutive effect of stock options, restricted stock, and restricted stock units.

AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)

ASSETS
June 30, September 30,
2009 2008
Current assets:
Cash and cash equivalents $912,924 $878,114
Accounts receivable, net 3,746,643 3,480,267
Merchandise inventories 4,424,228 4,211,775
Prepaid expenses and other 54,585 55,914
Assets held for sale - 43,691
Total current assets 9,138,380 8,669,761

Property and equipment, net 595,045 552,159
Other long-term assets 3,002,326 2,995,866

Total assets $12,735,751 $12,217,786

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $7,700,516 $7,326,580
Current portion of long-term debt 710 1,719
Other current liabilities 885,748 821,531
Liabilities held for sale - 17,759
Total current liabilities 8,586,974 8,167,589

Long-term debt, less current portion 1,190,225 1,187,412

Other long-term liabilities 174,234 152,740

Stockholders' equity 2,784,318 2,710,045

Total liabilities and stockholders' equity $12,735,751 $12,217,786

AMERISOURCEBERGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

Nine Nine
Months Ended Months Ended
June 30, June 30,
2009 2008

Operating Activities:
Net income $373,250 $135,652
Loss from discontinued operations 8,455 218,350
Income from continuing operations 381,705 354,002
Adjustments to reconcile income from continuing operations to net cash
provided by operating activities 170,269 137,413
Changes in operating assets and liabilities (114,282 ) (276,842 )
Net cash provided by operating activities - continuing operations 437,692 214,573
Net cash (used in) provided by operating activities - discontinued operations (7,233 ) 8,382
Net cash provided by operating activities 430,459 222,955

Investing Activities:
Capital expenditures (102,221 ) (80,621 )
Cost of acquired companies, net of cash acquired (13,422 ) (162,220 )
Proceeds from the sale of PMSI 14,936 -
Net short-term investment activity - 467,419
Proceeds from sales of other assets 32 2,593
Net cash (used in) provided by investing activities - continuing operations (100,675 ) 227,171
Net cash used in investing activities - discontinued operations (1,138 ) (1,273 )
Net cash (used in) provided by investing activities (101,813 ) 225,898

Financing Activities:
Net borrowings 21,548 13,762
Purchases of common stock (273,824 ) (553,675 )
Exercises of stock options 7,795 72,220
Cash dividends on common stock (45,924 ) (36,748 )
Other (3,431 ) (1,373 )
Net cash used in financing activities - continuing operations (293,836 ) (505,814 )
Net cash used in financing activities - discontinued operations - (157 )
Net cash used in financing activities (293,836 ) (505,971 )

Increase (decrease) in cash and cash equivalents 34,810 (57,118 )

Cash and cash equivalents at beginning of period 878,114 640,204

Cash and cash equivalents at end of period $912,924 $583,086

AMERISOURCEBERGEN CORPORATION
SUMMARY FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)

Three Months Ended June 30,
2009 2008 % Change

Total revenue $ 18,393,899 $ 17,996,666 2.2 %

Total gross profit $ 519,223 $ 498,045 4.3 %

Pharmaceutical Distribution operating income $ 213,200 $ 205,390 3.8 %
Facility consolidations, employee severance and other (213 ) (7,865 ) N/M
Total operating income $ 212,987 $ 197,525 7.8 %

Percentages of total revenue:

Pharmaceutical Distribution
Gross profit 2.82 % 2.77 %
Operating expenses 1.66 % 1.63 %
Operating income 1.16 % 1.14 %

AmerisourceBergen Corporation
Gross profit 2.82 % 2.77 %
Operating expenses 1.66 % 1.67 %
Operating income 1.16 % 1.10 %

AMERISOURCEBERGEN CORPORATION
SUMMARY FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)

Nine Months Ended June 30,
2009 2008 % Change

Total revenue $ 53,043,927 $ 53,031,887 - %

Pharmaceutical Distribution gross profit $ 1,561,542 $ 1,517,964 2.9 %
Gain on antitrust litigation settlements - 1,585 N/M
Total gross profit $ 1,561,542 $ 1,519,549 2.8 %

Pharmaceutical Distribution operating income $ 664,641 $ 633,010 5.0 %
Facility consolidations, employee severance and other (5,504 ) (9,426 ) N/M
Gain on antitrust litigation settlements - 1,585 N/M
Total operating income $ 659,137 $ 625,169 5.4 %

Percentages of total revenue:

Pharmaceutical Distribution
Gross profit 2.94 % 2.86 %
Operating expenses 1.69 % 1.67 %
Operating income 1.25 % 1.19 %

AmerisourceBergen Corporation
Gross profit 2.94 % 2.87 %
Operating expenses 1.70 % 1.69 %
Operating income 1.24 % 1.18 %

AmerisourceBergen Corporation
Michael N. Kilpatric, 610-727-7118
mkilpatric@amerisourcebergen.com

Copyright Business Wire 2009

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