AmerisourceBergen profits off

Chain Drug Review, Oct 13, 2008

Nine-month operating revenue climbed 10.4% to $50.86 billion. Bulk deliveries, however, declined 34.3% to $2.17 billion. With that, total revenue rose 7.4% to $53.03 billion from $49.38 billion in the prior-year period.

Year-to-date consolidated operating income improved 2.2% to $625.2 million, or 1.18% of total revenue--down from a 1.24% operating margin in fiscal 2007. Consolidated gross margin was down 61 basis points to 2.87%, while total operating expenses shrank 55 basis points to 1.69% of total revenue.

Mirroring third quarter results, the strong operating performance was bolstered by an 87% reduction of other loss to $513,000 from $3.96 million a year ago, while net interest expense vaulted 110% to $51.1 million. Income from continuing operations before income taxes consequently edged downward 1.7% to $573.6 million.

With the divestment of PharMerica Long Term Care and the sale and consequent reclassification of PMSI as a discontinued operation, AmerisourceBergen currently has organized its remaining businesses--which consist of Amerisource Bergen Drug Corp., the Specialty Group, the Packaging Group and Bellco Health--under one operating segment: the Pharmaceutical Distribution unit.

For comparative reporting purposes, however, the company's results are presented in two segments--Pharmaceutical Distribution and Other, which includes PharMerica but excludes PMSI.

In the third quarter of fiscal 2007 the Other segment contributed $306.7 million in revenue and $6.1 million in operating income.