ABC AmerisourceBergen Corp

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 23, 2015

AmerisourceBergen Corporation

(Exact name of Registrant as specified in its charter)

Registrant’s telephone number, including area code:  (610) 727-7000

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.                                        Results of Operations and Financial Condition.

On July 23, 2015, AmerisourceBergen Corporation (the “Company”) issued a news release announcing its earnings for the fiscal quarter ended June 30, 2015, and announcing its corresponding earnings conference call.

In its news release, the Company included certain non-U.S. Generally Accepted Accounting Principles (“non-GAAP”) financial measures. The adjustments made to arrive at these non-GAAP financial measures included warrant expense, gains on antitrust litigation settlements, LIFO expense, acquisition-related intangibles amortization, and employee severance, litigation and other expenses.  The adjustments made to diluted earnings per share relate to the share dilution resulting from the impact of the unexercised equity warrants, the impact from the shares repurchased under the Company’s special share repurchase programs and the related interest expense incurred in connection with the $600 million of 1.150% senior notes due in May 2017 issued by the Company solely in connection with the special share repurchase program.

Management considers GAAP financial measures, as well as the presented non-GAAP financial measures, in its evaluation of the Company’s operating performance.  Therefore, the Company believes that its presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors.  Reconciliations to the non-GAAP financial measures from the most directly comparable measures as reported in accordance with GAAP are attached to the news release attached as Exhibit 99.1 to this report, and should be viewed in addition to, and not in lieu of, financial measures calculated in accordance with GAAP.

The information in this Item 2.02, including the exhibit attached hereto as Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. This information shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference to such disclosure in this Form 8-K in such a filing.

Item 7.01.                                        Regulation FD Disclosure.

In the news release issued on July 23, 2015, the Company also announced its updated performance expectations for fiscal year 2015, including the impact of the MWI Veterinary Supply, Inc. transaction. The Company announced that it now expects adjusted diluted earnings per share from continuing operations in fiscal year 2015 to be in the range of $4.92 to $4.97, a 24 percent to 25 percent increase over fiscal year 2014. The Company announced that it expects revenue growth to be in the range of 12 percent to 13 percent and that it expects adjusted operating income growth in the 20 percent to 22 percent range. The Company expects adjusted operating margin to increase 9 to 11 basis points.  The Company also announced that it expects to generate free cash flow in the range of $2.8 billion to $3.2 billion, with capital expenditures in the $215 million range; and to spend approximately $300 million in regular share repurchases and $750 million in special share repurchases, subject to market conditions.

The information in this Item 7.01, including the exhibit attached hereto as Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that

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section. This information shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference to such disclosure in this Form 8-K in such a filing.

Item 9.01.             Financial Statements and Exhibits.

(d) Exhibit.

99.1  News Release, dated July 23, 2015, of AmerisourceBergen Corporation, regarding the Company’s earnings for the fiscal quarter ended June 30, 2015.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Exhibit 99.1

Contact:                                                Barbara Brungess

Vice President, Corporate & Investor Relations

610-727-7199

bbrungess@amerisourcebergen.com

AMERISOURCEBERGEN REPORTS

THIRD QUARTER FISCAL YEAR 2015 RESULTS

Now Expects Fiscal Year 2015 Adjusted Diluted EPS

to be in the range of $4.92 to $4.97

VALLEY FORGE, PA, July 23, 2015 — AmerisourceBergen Corporation (NYSE:ABC) today reported that in its fiscal year 2015 third quarter ended June 30, 2015, adjusted diluted earnings per share increased 18.8 percent to $1.20.  Revenue increased 12.8 percent to $34.2 billion in the quarter.  On the basis of U.S. generally accepted accounting principles (GAAP), diluted earnings per share were $0.89 for the June quarter of fiscal 2015.  In the tables that follow, we present our GAAP results as well as GAAP to non-GAAP reconciliations.

“Strong performance in our June quarter positions us very well to meet our financial and strategic objectives for the full year,” said Steven H. Collis, AmerisourceBergen President and Chief Executive Officer.  “Our outstanding cash generation, the investments we have made and will continue to make in improving our infrastructure and capabilities, and the strength of our presence in key growing markets has put us on course to deliver adjusted earnings per share growth of over 20 percent for the second consecutive year.  While it is still early in our planning process and there are many moving parts, we see a pathway to building on that performance and achieving adjusted earnings per share growth in the low-teens range for fiscal 2016.”

The comments below compare adjusted results, which exclude:

·                  Warrant expense;

·                  Gains on antitrust litigation settlements;

·                  LIFO expense;

·                  Acquisition related intangibles amortization; and

·                  Employee severance, litigation, and other expenses.

In addition, we calculate our adjusted earnings per share for each period using a diluted weighted average share count, which excludes the accounting dilution resulting from the impact of the unexercised equity warrants, and the impact from the shares repurchased under our special share repurchase programs.  We previously issued $600 million of 1.15% senior notes due in May 2017 to fund our initial special share repurchase program.  The interest expense incurred relating to this borrowing is also excluded from the non-GAAP presentation.

Summary of Adjusted Quarterly Results

·                  Revenue:  In the third quarter of fiscal 2015, revenue was $34.2 billion, up 12.8 percent compared to the same quarter in the previous fiscal year, reflecting a 9 percent increase in AmerisourceBergen Drug Corporation (ABDC) revenue, and a 22 percent increase in AmerisourceBergen Specialty Group (ABSG) revenue.

·                  Gross Profit:  Gross profit in the fiscal 2015 third quarter was $1.0 billion, a 22.4 percent increase over the same period in the previous year, driven by strong revenue growth in ABDC and ABSG, and the addition of a full quarter of results from MWI Veterinary Supply, Inc. (MWI).  Gross profit as a percentage of revenue increased 23 basis points to 2.94 percent.

·                  Operating Expenses:  In the third quarter of fiscal 2015, operating expenses were $551 million, up 28.5 percent over the same period in the last fiscal year.  The increase in operating expenses in the quarter was driven by additional costs to support the increase in revenue growth and the addition of MWI.  Operating expenses as a percentage of revenue in the fiscal 2015 third quarter were 1.61 percent compared with 1.41 percent for the same period in the previous fiscal year, driven by the higher expense profile of MWI.

·                  Operating Income:  In the fiscal 2015 third quarter, operating income of $455 million was up 15.7 percent versus the prior year, driven by the increase in gross profit, which was offset in part by the increase in operating expenses. Operating income as a percentage of revenue increased 3 basis points to 1.33 percent in the fiscal 2015 third quarter compared to the previous year’s third quarter.

·                  Tax Rate:  The effective tax rate for the third quarter of fiscal 2015 was 35.3 percent, down from 38.0 percent in the previous fiscal year’s third quarter, as growth in our international businesses, including our global manufacturer services business in Switzerland, has changed the mix of our domestic and foreign taxable income. We expect our annualized effective tax rate to be between 36 and 36.5 percent for the full fiscal year.

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·                  Earnings Per Share:  Diluted earnings per share were up 18.8 percent to $1.20 in the third quarter of fiscal year 2015 compared to $1.01 in the previous fiscal year’s third quarter, driven by the increase in operating income.

·                  Shares Outstanding:  Diluted weighted average shares outstanding for the third quarter of fiscal year 2015 were 231.3 million, flat versus the prior year as share repurchases offset employee stock option exercises.

Segment Discussion

The Pharmaceutical Distribution segment includes both AmerisourceBergen Drug Corporation and AmerisourceBergen Specialty Group.  Other includes AmerisourceBergen Consulting Services, World Courier, and MWI Veterinary Supply.

Pharmaceutical Distribution Segment

In the third fiscal quarter of 2015, Pharmaceutical Distribution revenues were $32.8 billion, an increase of 10 percent compared to the same quarter in the prior year.  ABDC revenues increased 9 percent, due primarily to the onboarding of the new Walgreens Boots Alliance, Inc. generic pharmaceuticals business, and solid organic sales growth in our independent pharmacy, alternate site, and health systems customers.  ABSG revenues increased 22 percent, which was driven by strong performance in our blood products, vaccine and physician office distribution businesses, the impact of manufacturer shifts of certain oncology products from full line distribution to specialty distribution, and an increase in sales to community oncology practices.  Intrasegment revenues between ABDC and ABSG have been eliminated in the presentation of total Pharmaceutical Distribution revenue.  Total intrasegment revenues were $1.6 billion and $1.1 billion in the quarters ended June 30, 2015 and 2014, respectively.

Operating income of $377.8 million in the June quarter of fiscal 2015 increased 5 percent compared to the same period in the previous year driven primarily by the strong revenue growth in ABSG.

Other

Revenues in Other were $1.5 billion in the third quarter of fiscal 2015, an increase of 147 percent over the same period in the prior year due to the addition of a full quarter of revenues from

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MWI.  Operating income increased 130 percent to $77 million in the third quarter of fiscal 2015, driven by the additional income from MWI.

Fiscal Year 2015 Expectations

Our updated expectations for financial performance in fiscal 2015, including the impact of the MWI transaction, are as follows:

·                  Adjusted diluted earnings per share in the range of $4.92 to $4.97, a 24 percent to 25 percent increase over fiscal 2014;

·                  Revenue growth in the range of 12 percent to 13 percent;

·                  Adjusted operating income growth in the 20 percent to 22 percent range;

·                  Adjusted operating margin increase of 9 to 11 basis points;

·                  Free cash flow generation in the range of $2.8 billion to $3.2 billion;

·                  Capital expenditures in the $215 million range;

·                  Regular share repurchases of approximately $300 million; and

·                  Special share repurchases of approximately $750 million.

Conference Call

The Company will host a conference call to discuss the results at 11:00 a.m. Eastern Time on July 23, 2015.

Participating in the conference call will be:

Steven H. Collis, President & Chief Executive Officer

Tim G. Guttman, Executive Vice President & Chief Financial Officer

The dial-in number for the live call will be (612) 234-9960.  No access code is required.  The live call will also be webcast via the Company’s website at www.amerisourcebergen.com.  Users are encouraged to log on to the webcast approximately 10 minutes in advance of the scheduled start time of the call.

Replays of the call will be made available via telephone and webcast.  A replay of the webcast will be posted on www.amerisourcebergen.com approximately two hours after the completion of the call and will remain available for thirty days.  The telephone replay will also be available approximately two hours after the completion of the call and will remain available for seven days.  To access the telephone replay from within the US, dial (800) 475-6701.  From outside the US, dial (320) 365-3844.  The access code for the replay is 364195.

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About AmerisourceBergen

AmerisourceBergen is one of the largest global pharmaceutical sourcing and distribution services companies, helping both healthcare providers and pharmaceutical and biotech manufacturers improve patient access to products and enhance patient care. With services ranging from drug distribution and niche premium logistics to reimbursement and pharmaceutical consulting services, AmerisourceBergen delivers innovative programs and solutions across the pharmaceutical supply channel in human medicine and animal health. With over $120 billion in annual revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and employs approximately 16,000 people. AmerisourceBergen is ranked #16 on the Fortune 500 list. For more information, go to www.amerisourcebergen.com.

AmerisourceBergen’s Cautionary Note Regarding Forward-Looking Statements

Certain of the statements contained in this press release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words such as “expect,” “likely,” “outlook,” “forecast,” “would,” “could,” “should,” “can,” “will,” “project,” “intend,” “plan,” “continue,” “sustain,” “synergy,” “on track,” “believe,” “seek,” “estimate,” “anticipate,” “may,” “possible,” “assume,” variations of such words, and similar expressions are intended to identify such forward-looking statements. These statements are based on management’s current expectations and are subject to uncertainty and change in circumstances. These statements are not guarantees of future performance and are based on assumptions that could prove incorrect or could cause actual results to vary materially from those indicated. Among the factors that could cause actual results to differ materially from those projected, anticipated, or implied are the following: competition; industry consolidation of both customers and suppliers resulting in increasing pressure to reduce prices for our products and services; changes in pharmaceutical market growth rates; price inflation in branded and generic pharmaceuticals and price deflation in generics; declining economic conditions in the United States and abroad; financial market volatility and disruption; substantial defaults in payment, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; the loss, bankruptcy or insolvency of a major supplier; changes to the customer or supplier mix; the retention of key customer or supplier relationships under less favorable economics or the adverse resolution of any contract or other dispute with customers or suppliers; interest rate and foreign currency exchange rate fluctuations; the disruption of AmerisourceBergen’s cash flow and ability to return value to its stockholders in accordance with its past practices; risks associated with the strategic, long-term relationship between Walgreen Boots Alliance, Inc. and AmerisourceBergen, including with respect to the pharmaceutical distribution agreement and/or the global sourcing joint venture;  risks associated with the potential impact on AmerisourceBergen’s earnings per share resulting from the issuance of the warrants to subsidiaries of Walgreen Boots Alliance, Inc. (the “Warrants”); AmerisourceBergen’s inability to implement its hedging strategy to mitigate the potentially dilutive effect of the issuance of its common stock in accordance with the Warrants under its special share repurchase program due to its financial performance, the current and future share price of its common stock, its expected cash flows, competing priorities for capital, and overall market conditions; changes in the United States healthcare and regulatory environment; increasing governmental regulations regarding the pharmaceutical supply channel; federal and state government enforcement initiatives to detect and prevent suspicious orders of controlled substances and the diversion of controlled substances; federal and state prosecution of alleged violations of related laws and regulations, and any related litigation, including shareholder derivative lawsuits or other disputes relating to our distribution of controlled substances; increased federal scrutiny and qui tam litigation for alleged violations of fraud and abuse laws and regulations and/or any other laws and regulations governing the marketing, sale, purchase and/or dispensing of pharmaceutical products or services and any related litigation; material adverse resolution of pending legal proceedings; declining reimbursement rates for pharmaceuticals; the acquisition of businesses that do not perform as expected, or that are difficult to integrate or control, including the integration of recently-acquired MWI or ability to capture all of the anticipated synergies related thereto; managing foreign expansion, including non-compliance with the U.S. Foreign Corrupt Practices Act, anti-bribery laws and economic sanctions and import laws and regulations; malfunction, failure or breach of the sophisticated information systems to operate as designed; risks generally associated with data privacy regulation and the international transfer of personal data; changes in tax laws or legislative initiatives that could adversely affect AmerisourceBergen’s tax positions and/or AmerisourceBergen’s tax liabilities or adverse resolution of challenges to AmerisourceBergen’s tax positions; natural disasters or other unexpected events that affect AmerisourceBergen’s operations; and other economic, business, competitive, legal, tax, regulatory and/or operational factors affecting AmerisourceBergen’s business generally. Certain additional factors that management believes could cause actual outcomes and results to differ materially from those described in forward-looking statements are set forth (i) in Item 1A (Risk Factors) and Item 1 (Business) in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2014 and elsewhere in that report and (ii) in other reports.

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AMERISOURCEBERGEN CORPORATION

FINANCIAL SUMMARY

(In thousands, except per share data)

(unaudited)

1              Includes a $158.7 million LIFO expense charge and a $43.6 million gain from antitrust litigation settlements in the three months ended June 30, 2015.  Includes a $133.2 million LIFO expense charge and a $2.5 million gain from antitrust litigation settlements in the three months ended June 30, 2014.

2              Stock options, restricted stock, restricted stock units and the Warrants issued to Walgreens Boots Alliance were dilutive for the three months ended June 30, 2015.  As a result of the net loss, these items were anti-dilutive in the three months ended June 30, 2014.

AMERISOURCEBERGEN CORPORATION

FINANCIAL SUMMARY

(In thousands, except per share data)

(unaudited)

1 Includes a $453.9 million LIFO expense charge and a $65.1 million gain from antitrust litigation settlements in the nine months ended June 30, 2015.  Includes a $293.6 million LIFO expense charge and a $24.4 million gain from antitrust litigation settlements in the nine months ended June 30, 2014.

2 Includes a $9.1 million loss on the sale of a small technology business.

3 As a result of the net loss, stock options, restricted stock, restricted stock units and the Warrants issued to Walgreens Boots Alliance were anti-dilutive for the nine months ended June 30, 2015.  The dilutive effect of these items is included in the nine months ended June 30, 2014.

AMERISOURCEBERGEN CORPORATION

GAAP TO NON-GAAP RECONCILIATIONS

(in thousands, except per share data)

(unaudited)

1 The amount of Warrant expense deductible for tax purposes is based on the initial valuation of the Warrants.  Therefore, the income tax rate on Warrant expense will vary by quarter depending upon the quarterly changes in the fair value of the Warrants.  In connection with the fiscal 2014 special $650 million share repurchase program, the Company issued $600 million of 1.15% senior notes due in May 2017.  The interest expense incurred relating to this borrowing has been excluded from the non-GAAP presentation.

Note: Management considers GAAP financial measures as well as the presented non-GAAP financial measures in evaluating the Company’s operating performance.  Therefore, the Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors.

AMERISOURCEBERGEN CORPORATION

GAAP TO NON-GAAP RECONCILIATIONS

(in thousands, except per share data)

(unaudited)

1 The amount of Warrant expense deductible for tax purposes is based on the initial valuation of the Warrants.  Therefore, the income tax rate on Warrant expense will vary by quarter depending upon the quarterly changes in the fair value of the Warrants.  In connection with the fiscal 2014 special $650 million share repurchase program, the Company issued $600 million of 1.15% senior notes due in May 2017.  The interest expense incurred relating to this borrowing has been excluded from the non-GAAP presentation.

Note: Management considers GAAP financial measures as well as the presented non-GAAP financial measures in evaluating the Company’s operating performance.  Therefore, the Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors.

AMERISOURCEBERGEN CORPORATION

GAAP TO NON-GAAP RECONCILIATIONS

(in thousands, except per share data)

(unaudited)