Summary
Cencora, Inc. (formerly AmerisourceBergen Corporation) reported a mixed financial performance for the quarter ended June 30, 2013. Revenue saw a significant increase of 13.3% year-over-year to $21.9 billion, driven by growth in both the Pharmaceutical Distribution and Other segments. This growth was bolstered by a new ten-year distribution agreement with Walgreens, expected to contribute substantially in fiscal 2014, and a large contract with Express Scripts. However, profitability was impacted by a substantial LIFO charge of $122.1 million in the quarter, leading to a 15.8% decrease in gross profit to $562.5 million. Operating income also fell significantly by 58.5% to $134.6 million. The company also reported significant warrant expense related to its strategic arrangements with Walgreens and Alliance Boots, impacting the effective tax rate. Discontinued operations, stemming from the divestiture of AndersonBrecon and AmerisourceBergen Canada Corporation, contributed a gain on sale in the current quarter. The company maintained a strong liquidity position with substantial availability under its credit facilities and reported a robust cash flow from operations, although working capital saw some pressure from increased inventory and receivables.
Financial Highlights
54 data points| Revenue | $21.91B |
| Cost of Revenue | $21.34B |
| Gross Profit | $562.45M |
| SG&A Expenses | $331.17M |
| Operating Income | $134.65M |
| Net Income | $168.44M |
| EPS (Basic) | $0.73 |
| EPS (Diluted) | $0.71 |
| Shares Outstanding (Basic) | 231.00M |
| Shares Outstanding (Diluted) | 235.67M |
Key Highlights
- 1Revenue increased by 13.3% to $21.9 billion, driven by the Pharmaceutical Distribution segment and the 'Other' segment, benefiting from new agreements.
- 2Gross profit decreased by 15.8% to $562.5 million, largely due to a $122.1 million LIFO charge recorded in the current quarter related to increased branded inventory for the Walgreens contract.
- 3Operating income saw a substantial decrease of 58.5% to $134.6 million, impacted by the LIFO charge and significant warrant expense related to the Walgreens/Alliance Boots strategic partnership.
- 4The company divested its packaging and clinical trials services business (AndersonBrecon) and AmerisourceBergen Canada Corporation in May 2013, resulting in a gain on sale reported within discontinued operations.
- 5A strategic partnership with Walgreens and Alliance Boots was announced, including a ten-year pharmaceutical distribution agreement and the issuance of warrants, which are a significant non-cash expense impacting earnings.
- 6Cash flow from operations remained strong at $819.1 million for the nine months ended June 30, 2013, despite increased working capital needs from higher inventory and accounts receivable.
- 7The company amended and extended its multi-currency revolving credit facility and increased availability under its receivables securitization facility, maintaining strong liquidity.