8-KRegulation FDOther EventsExhibits & Filings

Cencora, Inc. 8-K Report, Regulation FD Disclosure (Apr 1, 2013)

Filed April 1, 2013For Securities:COR

Summary

Cencora, Inc. (formerly AmerisourceBergen Corporation) filed an 8-K on March 31, 2013, reporting a revision to its fiscal year 2013 financial guidance and the sale of its Canadian pharmaceutical distribution business. The company increased its projected earnings per share from continuing operations to a range of $3.04 to $3.14, up from $2.96 to $3.06, while maintaining expectations for revenue growth between 8% and 10%. This updated guidance excludes significant one-time expenses related to its new strategic partnership with Walgreen Co. and Alliance Boots, such as LIFO expenses and non-cash charges from equity warrants. In a significant strategic move, Cencora also announced the definitive agreement to sell its Canadian subsidiary, AmerisourceBergen Canada Corporation (ABCC), to Kohl & Frisch Limited for an estimated $80 million to $100 million. This divestiture is expected to result in an estimated loss on sale and impairment charges of $160 million to $180 million in the March 2013 quarter, which will be classified under discontinued operations. ABCC represented a small portion of the company's overall revenue, approximately 2%.

Key Highlights

  • 1Revised FY2013 EPS guidance upwards to $3.04-$3.14, excluding certain one-time expenses.
  • 2Maintained FY2013 revenue growth expectations at 8%-10%.
  • 3Announced agreement to sell Canadian pharmaceutical distribution business (ABCC) to Kohl & Frisch Limited.
  • 4Estimated sale price for ABCC is between $80 million and $100 million.
  • 5Expects to record an estimated loss on sale and impairment charges of $160 million-$180 million in Q1 FY2013 related to the ABCC divestiture.
  • 6ABCC represented approximately 2% of Cencora's total revenue.
  • 7Continued expectation to repurchase approximately $400 million of common stock in FY2013.

Frequently Asked Questions

Cencora revised its financial guidance primarily due to stronger-than-anticipated performance, leading to an increase in expected earnings per share for fiscal year 2013. The company raised its EPS forecast from $2.96-$3.06 to $3.04-$3.14, while maintaining revenue growth expectations. This revision excludes certain one-time costs associated with its strategic relationship with Walgreen Co. and Alliance Boots.

While not explicitly detailed in this 8-K, the sale of the Canadian pharmaceutical distribution business (ABCC) suggests a strategic decision to focus on core operations or divest non-core assets. The company is selling ABCC to Kohl & Frisch Limited, a Canadian-owned distributor, as part of its ongoing business strategy.

The sale of ABCC is expected to result in an estimated loss on sale and impairment charges of $160 million to $180 million. This loss, along with ABCC's operating losses, will be reported as part of discontinued operations in the company's March 2013 quarterly results. The estimated sale price is between $80 million and $100 million.

No, the revised earnings per share range of $3.04 to $3.14 does not include the impact of significant one-time expenses anticipated from the new strategic long-term relationship with Walgreen Co. and Alliance Boots. These expenses include a LIFO expense due to inventory build and recurring non-cash expenses related to equity warrants.