Summary
AmerisourceBergen Corporation (now Cencora, Inc.) filed an 8-K on September 12, 2007, to report on the final judgment in the "Bridge Medical Matter." The Delaware Court of Chancery ordered the company to pay $21 million plus $5.9 million in prejudgment interest, totaling $26.9 million. This legal matter resulted in a charge of $24.6 million, net of income taxes, which will be recorded in discontinued operations for the fourth quarter ending September 30, 2007. Despite this significant legal setback, the company stated that its fiscal year 2007 expectations for diluted earnings per share from continuing operations remain unchanged. AmerisourceBergen intends to appeal the court's decision, believing it to be in error. Investors should note that while the charge is substantial, it pertains to discontinued operations and does not impact the company's ongoing business performance outlook for the fiscal year. The company expects to realize a tax benefit related to the interest portion of the settlement.
Key Highlights
- 1Final judgment entered in the "Bridge Medical Matter" against AmerisourceBergen.
- 2Total amount awarded: $21 million in judgment plus $5.9 million in prejudgment interest.
- 3Net charge to be recorded in discontinued operations: $24.6 million after considering income taxes.
- 4The charge will impact the fourth quarter of fiscal year 2007.
- 5Company expects to receive a tax benefit on the interest incurred.
- 6AmerisourceBergen intends to appeal the Delaware Court of Chancery's decision.
- 7Fiscal 2007 diluted EPS expectations from continuing operations are unaffected.