Summary
AmerisourceBergen Corporation (COR) reported a significant increase in revenue for the quarter ended December 31, 2013, driven primarily by its Pharmaceutical Distribution segment, which saw a 39% uplift year-over-year. This growth is largely attributable to the new distribution contract with Walgreens, which significantly boosted sales for ABDC. Despite the revenue surge, net income and diluted earnings per share from continuing operations saw a substantial decrease compared to the prior year quarter. This decline is primarily due to a significant increase in operating expenses, notably the $116.3 million warrant expense related to agreements with Walgreens and Alliance Boots, and a higher effective income tax rate resulting from the non-deductible portion of this warrant expense. Despite the decrease in profitability, the company's liquidity remains strong, supported by substantial availability under its revolving credit facility and receivables securitization facility. Management anticipates continued revenue growth in fiscal year 2014, fueled by the ongoing integration of the Walgreens contract and potential benefits from the Affordable Care Act. Investors should note the substantial one-time warrant expense and the related impact on tax rates as key factors influencing the current quarter's profitability, while also recognizing the underlying operational growth driven by strategic partnerships.
Financial Highlights
53 data points| Revenue | $29.18B |
| Cost of Revenue | $28.49B |
| Gross Profit | $688.23M |
| SG&A Expenses | $364.06M |
| Operating Income | $159.62M |
| Net Income | $41.38M |
| EPS (Basic) | $0.18 |
| EPS (Diluted) | $0.17 |
| Shares Outstanding (Basic) | 230.28M |
| Shares Outstanding (Diluted) | 237.01M |
Key Highlights
- 1Revenue increased by 38.5% to $29.2 billion for the quarter ended December 31, 2013, primarily driven by the Pharmaceutical Distribution segment's 39% growth.
- 2The significant revenue increase in the Pharmaceutical Distribution segment was largely due to higher sales to Walgreens ($6.6 billion increase) and other large customers.
- 3Net income from continuing operations decreased by 72.0% to $48.9 million, with diluted EPS from continuing operations falling to $0.21 from $0.74 in the prior year quarter.
- 4A substantial warrant expense of $116.3 million was recognized in the current quarter related to agreements with Walgreens and Alliance Boots, significantly impacting operating income.
- 5The effective income tax rate increased to 65.4% from 37.8% in the prior year, largely due to the non-tax-deductible portion of the warrant expense.
- 6The company maintained strong liquidity with $347.5 million in cash and cash equivalents and substantial availability under its credit facilities.
- 7Management anticipates continued revenue growth in fiscal 2014, driven by the Walgreens distribution contract and expects capital expenditures of approximately $300 million.