8-KEarnings & ResultsRegulation FDExhibits & Filings

Cencora, Inc. 8-K Report, Financial Results (Apr 24, 2014)

Filed April 24, 2014For Securities:COR

Summary

Cencora, Inc. (formerly AmerisourceBergen Corporation) filed an 8-K on April 24, 2014, primarily to report its financial results for the fiscal quarter ended March 31, 2014. The filing includes a press release detailing operational performance and forward-looking guidance. A key aspect is the company's use of non-GAAP financial measures, which management believes offer a more insightful view of operating performance by excluding items such as gains from antitrust litigation, LIFO expense, amortization of acquisition intangibles, and warrant-related expenses. Investors should note the provided guidance for fiscal year 2014, which includes an adjusted diluted earnings per share (EPS) range of $3.64 to $3.74. The company also reaffirmed expectations for strong revenue growth between 30% and 34%, and adjusted operating income growth of 12% to 16%. However, a projected decline in adjusted operating margin (20-23 basis points) is attributed to the onboarding of new, lower-margin business and growth within brand pharmaceutical segments for large clients. The company also reiterated its free cash flow generation targets and capital expenditure plans.

Key Highlights

  • 1AmerisourceBergen Corporation (now Cencora) reported Q1 2014 earnings and provided FY2014 guidance.
  • 2The company presented non-GAAP financial measures, adjusting for items like litigation gains, LIFO expense, and amortization.
  • 3Reaffirmed FY2014 revenue growth expectation of 30% to 34%.
  • 4Reaffirmed FY2014 adjusted operating income growth expectation of 12% to 16%.
  • 5Projected FY2014 adjusted diluted EPS from continuing operations to be in the range of $3.64 to $3.74.
  • 6Anticipated an adjusted operating margin decline of 20 to 23 basis points in FY2014.
  • 7Maintained expectation to generate free cash flow between $500 million and $700 million in FY2014.

Frequently Asked Questions

The 8-K filing on April 24, 2014, primarily serves to announce the earnings for the fiscal quarter ended March 31, 2014, along with providing forward-looking guidance. Specific detailed quarterly results are available in the referenced press release (Exhibit 99.1).

The company uses non-GAAP financial measures because management believes they provide a more useful and comparable view of operating performance. Adjustments include gains from antitrust litigation settlements, LIFO expense, amortization of acquisition-related intangibles, warrant expense, severance, and other litigation/expenses. These are detailed in the press release and reconciliations are provided.

For fiscal year 2014, Cencora expects adjusted diluted EPS from continuing operations to be between $3.64 and $3.74. Revenue growth is still expected in the 30% to 34% range, and adjusted operating income growth is projected at 12% to 16%. A margin decline of 20-23 basis points is anticipated due to new business onboarding.

The company anticipates an adjusted operating margin decline of 20 to 23 basis points in fiscal year 2014. This is primarily attributed to the onboarding of significant new business that carries lower margins and continued growth in brand pharmaceutical business with their large customers.