01—Abstract
Summary
Summary of the 10-K filed November 19, 2020. Cited figures are marked; the original filing is the authoritative source.
Cencora, Inc. (formerly AmerisourceBergen Corporation) reported significant changes in its fiscal year 2020, primarily driven by a substantial legal accrual related to opioid litigation.
While revenue saw a healthy increase of 5.7% year-over-year, reaching nearly $190 billiona, the company recorded a net loss of $3.4 billion due to the $6.6 billion legal accrual. This accrual significantly impacted operating income and diluted earnings per share. Despite this, the company highlighted revenue growth in its Pharmaceutical Distribution Services segment, driven by specialty products and key customer relationships, and also saw growth in its Other segments (MWI Animal Health, Global Commercialization Services).
Looking ahead, Cencora's strategy remains focused on optimizing its pharmaceutical distribution and global commercialization services, with continued investment in technology and automation. The company also faces ongoing risks related to pricing pressures, competition, regulatory changes, and the broader economic impact of the COVID-19 pandemic, which it actively manages while pursuing strategic growth initiatives.
02—Key points
Key Highlights
- Revenue increased by 5.7% to $189.9 billion for the fiscal year ended September 30, 2020.
- The company recorded a significant legal accrual of $6.6 billion related to opioid litigation, resulting in a net loss of $3.4 billion for the fiscal year.
- Pharmaceutical Distribution Services segment revenue grew 5.6%, driven by specialty product sales and key customer relationships.
- Other segments (MWI Animal Health, Global Commercialization Services) also showed revenue growth of 9.6%.
- Distribution, selling, and administrative expenses increased by 3.9%, largely due to supporting revenue growth and business transformation efforts.
- The company continued its practice of increasing quarterly dividends, with a 5% increase announced in November 2020.
- Cencora maintained effective internal controls over financial reporting as of September 30, 2020.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2020, Cencora, Inc. lost $0.02.
- Revenue$189.89B100.0%
- Cost of revenue−$184.70B97.3%
- Gross profit$5.19B2.7%
- Operating costs−$10.33B5.4%
- Operating income−$5.14B2.7%
- Interest, other & tax$1.73B0.9%
- Net income−$3.41B1.8%
04—Financials
Financial Highlights
Figures from 10-KFY2020filed November 19, 2020Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $189.89B$179.59B | +5.7% |
| Cost of Revenue | $184.70B$174.45B | +5.9% |
| Gross Profit | $5.19B$5.14B | +1.0% |
| SG&A Expenses | $2.77B$2.66B | +3.9% |
| Operating Income | -$5.14B$1.11B | −561.8% |
| Net Income | -$3.41B$855.37M | −498.5% |
| EPS (Basic) | $-16.65$4.07 | −509.1% |
| EPS (Diluted) | $-16.65$4.04 | −512.1% |
| Shares Outstanding (Basic) | 204.78M210.16M | −2.6% |
| Shares Outstanding (Diluted) | 204.78M211.84M | −3.3% |
05—Questions
Frequently Asked Questions
What was the primary factor impacting Cencora's net income in fiscal year 2020?
The primary factor impacting Cencora's net income in fiscal year 2020 was a substantial legal accrual of $6.6 billion related to opioid litigation, which led to a net loss of $3.4 billion for the year.
How did Cencora's revenue perform in fiscal year 2020?
Cencora's revenue increased by 5.7% to $189.9 billion for the fiscal year ended September 30, 2020, primarily driven by growth in its Pharmaceutical Distribution Services segment, which benefited from strong specialty product sales and key customer relationships.
What are Cencora's key business segments, and how did they perform?
Cencora operates primarily through two segments: Pharmaceutical Distribution Services and Other. The Pharmaceutical Distribution Services segment experienced revenue growth of 5.6%. The Other segment, which includes MWI Animal Health and Global Commercialization Services, saw a 9.6% increase in revenue.
What is the company's outlook regarding dividends?
Cencora's board of directors has a history of increasing quarterly dividends. In November 2020, they approved a 5% increase, bringing the quarterly dividend to $0.44 per share, and the company anticipates continuing to pay quarterly cash dividends.
What are the major risks Cencora highlighted in this filing?
Key risks highlighted include unfavorable pharmaceutical pricing trends, intense competition and industry consolidation, potential customer or supplier credit failures, impacts from the COVID-19 pandemic on operations and demand, and significant legal and regulatory risks, including ongoing opioid litigation and evolving government regulations.
06—Continue