8-KOther Events

Cencora, Inc. 8-K Report, Corporate Update (Sep 6, 2007)

Filed September 6, 2007For Securities:COR

Summary

Cencora, Inc. (formerly AmerisourceBergen Corporation) filed an 8-K on September 5, 2007, to report on the status of a legal proceeding known as the "Bridge Medical Matter." The Delaware Court of Chancery ruled that the former stockholders of Bridge Medical, Inc. are entitled to $21 million in "Earnout Amounts" related to AmerisourceBergen's 2003 acquisition of Bridge Medical. The company disputes this ruling and intends to appeal. This $21 million judgment will be recorded as a charge against discontinued operations in the fourth quarter of fiscal 2007, with no expected tax benefit. Importantly, the company stated that this legal outcome does not impact its previously issued fiscal 2007 expectations for diluted earnings per share from continuing operations.

Key Highlights

  • 1AmerisourceBergen Corporation (now Cencora, Inc.) reported a legal ruling concerning the "Bridge Medical Matter."
  • 2The Delaware Court of Chancery ordered the company to pay $21 million in contingent purchase price ("Earnout Amounts") to former Bridge Medical stockholders.
  • 3The ruling also awarded nominal damages for other claims related to the acquisition of Bridge Medical in 2003.
  • 4AmerisourceBergen disagrees with the ruling and plans to appeal the decision.
  • 5A charge of $21 million will be recorded in discontinued operations for the fourth quarter ending September 30, 2007.
  • 6The company does not anticipate a tax benefit related to this $21 million charge.
  • 7Fiscal 2007 diluted earnings per share expectations from continuing operations remain unchanged by this ruling.

Frequently Asked Questions

The "Bridge Medical Matter" refers to a lawsuit filed by the former stockholders of Bridge Medical, Inc. against AmerisourceBergen Corporation. The lawsuit claimed entitlement to certain "Earnout Amounts" from the 2003 acquisition of Bridge Medical and alleged a breach of obligations related to promoting Bridge Medical's product.

The Delaware Court of Chancery ruled that former Bridge Medical stockholders are entitled to $21 million for "Earnout Amounts" and nominal damages for other claims. AmerisourceBergen believes the decision is incorrect and intends to appeal.

The company will record a $21 million charge in discontinued operations for the fourth quarter of fiscal year 2007. This charge is related to the Bridge Medical acquisition, which the company had previously divested.

No, AmerisourceBergen explicitly stated that its fiscal 2007 expectations for diluted earnings per share from continuing operations are not affected by this decision and remain unchanged.