AmerisourceBergen Reports Fiscal 2022 Second Quarter Results

Revenues of $57.7 billion for the Second Quarter, a 17.4 Percent Increase Year-Over-Year

Second Quarter GAAP Diluted EPS of $2.59 and Adjusted Diluted EPS of $3.22

Adjusted Diluted EPS Guidance Range Raised to $10.80 to $11.05 for Fiscal 2022

AmerisourceBergen Corporation (NYSE: ABC) today reported that in its fiscal year 2022 second quarter ended March 31, 2022, revenue increased 17.4 percent year-over-year to $57.7 billion. On the basis of U.S. generally accepted accounting principles (GAAP), diluted earnings per share (EPS) was $2.59 for the March quarter of fiscal 2022 compared to $2.10 in the prior year quarter. Adjusted diluted EPS, which is a non-GAAP measure that excludes items described below, increased 27.3 percent to $3.22 in the fiscal second quarter.

AmerisourceBergen is updating its outlook for fiscal year 2022. The Company does not provide forward-looking guidance on a GAAP basis, as discussed below in Fiscal Year 2022 Expectations. Adjusted diluted EPS guidance has been raised from the previous range of $10.60 to $10.90 to a range of $10.80 to $11.05.

"As a global healthcare solutions leader, AmerisourceBergen is advancing pharmaceutical innovation and access to create a positive impact on the health of people and communities around the world," said Steven H. Collis, Chairman, President & Chief Executive Officer of AmerisourceBergen. "During the quarter, we delivered strong performance through execution across our business and continuing to play our vital role in the healthcare system."

"Our strong results in the first half of the year and updated fiscal 2022 guidance reflect the commitment and achievements of our 42,000 purpose-driven team members as we continue to deliver on our strategic imperatives," Mr. Collis continued. "As we move into the second half of our fiscal year with significant momentum, we remain focused on execution and continuing to help our partners navigate the complex and evolving healthcare landscape."

Second Quarter Fiscal Year 2022 Summary Results

Below, AmerisourceBergen presents descriptive summaries of the Company’s GAAP and adjusted (non-GAAP) quarterly results. In the tables that follow, GAAP results and GAAP to non-GAAP reconciliations are presented. For more information related to non-GAAP financial measures, including adjustments made in the periods presented, please refer to the "Supplemental Information Regarding non-GAAP Financial Measures" following the tables.

Second Quarter GAAP Results

• Revenue: In the second quarter of fiscal 2022, revenue was $57.7 billion, up 17.4 percent compared to the same quarter in the previous fiscal year, reflecting a 585.3 percent increase in revenue within International Healthcare Solutions, which was primarily driven by the June 2021 acquisition of Alliance Healthcare, and a 5.8 percent increase in U.S. Healthcare Solutions revenue.

• Gross Profit: Gross profit in the second quarter of fiscal 2022 was $2.2 billion, a 45.8 percent increase compared to the same period in the previous fiscal year due to an increase in gross profit in International Healthcare Solutions, which was primarily driven by the June 2021 acquisition of Alliance Healthcare, and an increase in gross profit in U.S. Healthcare Solutions. Gross profit as a percentage of revenue was 3.87 percent, an increase of 75 basis points from the prior year quarter primarily driven by the June 2021 acquisition of Alliance Healthcare.

• Operating Expenses: In the second quarter of fiscal 2022, operating expenses were $1.5 billion, a 60.1 percent increase, primarily as a result of increases in distribution, selling, and administrative expenses and depreciation and amortization expense compared to the prior year quarter primarily due to the June 2021 acquisition of Alliance Healthcare.

• Operating Income: In the second quarter of fiscal 2022, operating income was $780.2 million, a 25.0 percent increase compared to the same period in the prior fiscal year. The increase was due to a 260.8 percent increase in operating income within International Healthcare Solutions and an 11.4 percent increase in U.S. Healthcare Solutions' operating income. Operating income as a percentage of revenue was 1.35 percent in the second quarter of fiscal 2022, an increase of 8 basis points when compared to the same period in the previous fiscal year primarily due to the June 2021 acquisition of Alliance Healthcare and fees earned relating to the distribution of government-owned COVID-19 treatments.

• Interest Expense, Net: In the second quarter of fiscal 2022, net interest expense of $52.9 million was up 53.3 percent versus the prior year quarter due to an increase in debt as a result of the June 2021 acquisition of Alliance Healthcare.

• Effective Tax Rate: The effective tax rate was 23.7 percent for the second quarter of fiscal 2022 compared to 23.4 percent in the prior year quarter.

• Diluted Earnings Per Share: Diluted earnings per share was $2.59 in the second quarter of fiscal 2022, a 23.3 percent increase compared to $2.10 in the previous fiscal year’s second quarter.

• Diluted Shares Outstanding: Diluted weighted average shares outstanding for the second quarter of fiscal 2022 were 212.0 million, a 2.3 percent increase versus the prior fiscal year second quarter primarily resulting from stock option exercises, restricted stock vesting, and the June 2021 issuance of 2 million shares of the Company's common stock to Walgreens Boots Alliance, Inc. ("WBA") in connection with the acquisition of Alliance Healthcare.

Second Quarter Adjusted (non-GAAP) Results

• Revenue: No adjustments were made to the GAAP presentation of revenue. In the second quarter of fiscal 2022, revenue was $57.7 billion, up 17.4 percent compared to the same quarter in the previous fiscal year, reflecting a 585.3 percent increase in revenue within International Healthcare Solutions, which was primarily driven by the June 2021 acquisition of Alliance Healthcare, and a 5.8 percent increase in U.S. Healthcare Solutions revenue.

• Adjusted Gross Profit: Adjusted gross profit in the second quarter of fiscal 2022 was $2.2 billion, a 46.6 percent increase compared to the same period in the previous fiscal year due to increases in gross profit in International Healthcare Solutions, which was primarily driven by the June 2021 acquisition of Alliance Healthcare, and U.S. Healthcare Solutions. Adjusted gross profit as a percentage of revenue was 3.84 percent in the fiscal 2022 second quarter, an increase of 76 basis points when compared to the prior year quarter primarily driven by the June 2021 acquisition of Alliance Healthcare.

• Adjusted Operating Expenses: In the second quarter of fiscal 2022, adjusted operating expenses were $1.3 billion, a 61.4 percent increase, primarily as a result of increases in distribution, selling, and administrative expenses and depreciation expense compared to the prior year quarter primarily due to the June 2021 acquisition of Alliance Healthcare.

• Adjusted Operating Income: In the second quarter of fiscal 2022, adjusted operating income was $916.6 million, a 29.7 percent increase compared to the same period in the prior fiscal year. The increase was due to a 260.8 percent increase in operating income within International Healthcare Solutions and an 11.4 percent increase in U.S. Healthcare Solutions' operating income. Adjusted operating income as a percentage of revenue was 1.59 percent in the fiscal 2022 second quarter, an increase of 15 basis points when compared to the prior year quarter primarily due to the June 2021 Alliance Healthcare acquisition and fees earned relating to the distribution of government-owned COVID-19 treatments.

• Interest Expense, Net: No adjustments were made to the GAAP presentation of net interest expense. In the second quarter of fiscal 2022, net interest expense of $52.9 million was up 53.3 percent versus the prior year quarter due to an increase in debt as a result of the June 2021 acquisition of Alliance Healthcare.

• Adjusted Effective Tax Rate: The adjusted effective tax rate was 21.0 percent for the second quarter of fiscal 2022 compared to 21.9 percent in the prior year quarter.

• Adjusted Diluted Earnings Per Share: Adjusted diluted earnings per share was $3.22 in the second quarter of fiscal 2022, a 27.3 percent increase compared to $2.53 in the previous fiscal year’s second quarter.

• Diluted Shares Outstanding: No adjustments were made to the GAAP presentation of diluted shares outstanding. Diluted weighted average shares outstanding for the second quarter of fiscal 2022 were 212.0 million, a 2.3 percent increase versus the prior fiscal year second quarter primarily resulting from stock option exercises, restricted stock vesting, and the June 2021 issuance of 2 million shares of the Company's common stock to WBA in connection with the acquisition of Alliance Healthcare.

Segment Discussion

The Company is organized geographically based upon the products and services it provides to its customers. In the first quarter of fiscal 2022, the Company re-aligned its reporting structure under two reportable segments: U.S. Healthcare Solutions and International Healthcare Solutions. U.S. Healthcare Solutions consists of the legacy Pharmaceutical Distribution Services reportable segment (excluding Profarma), MWI Animal Health, Xcenda, Lash Group, and ICS 3PL. International Healthcare Solutions consists of Alliance Healthcare, World Courier, Innomar, Profarma, and Profarma Specialty. The Company’s previously reported segment results have been revised to conform to its re-aligned reporting structure.

U.S. Healthcare Solutions

U.S. Healthcare Solutions revenue was $50.9 billion in the second quarter of fiscal 2022, an increase of 5.8 percent compared to the same quarter in the prior fiscal year primarily due to overall market growth and increased sales to specialty physician practices, partially offset by a decline in sales of commercial COVID-19 treatments. Segment operating income of $729.5 million in the second quarter of fiscal 2022 was up 11.4 percent compared to the same period in the previous fiscal year as a result of an increase in gross profit, including fees earned relating to the distribution of government-owned COVID-19 treatments and gross profit on sales to specialty physician practices.

International Healthcare Solutions

Revenue in International Healthcare Solutions was $6.8 billion in the second quarter of fiscal 2022, an increase from the previous fiscal year’s second quarter of 585.3 percent, primarily due to the June 2021 acquisition of Alliance Healthcare. Segment operating income in the second quarter of fiscal 2022 was $187.1 million, an increase of 260.8 percent, primarily due to the June 2021 acquisition of Alliance Healthcare.

Recent Company Highlights & Milestones

• Good Neighbor Pharmacy, AmerisourceBergen’s nationwide network of independent community pharmacies, has exceeded 5 million COVID-19 vaccine doses allocated to independent pharmacies across the U.S. This allocation effort is a part of the Federal Retail Pharmacy Program for COVID-19 Vaccination, a collaboration between the Federal Government, U.S. states and territories, and 21 national pharmacy partners, which includes Good Neighbor Pharmacy.

• AmerisourceBergen announced the establishment of AB Health Ventures, a dedicated corporate venture capital fund that will invest in and partner with emerging healthcare startup companies working to transform healthcare for people and animals globally. AB Health Ventures initially launched with $150 million allocated for investment in early-to mid-stage health-related startups around the world.

• AmerisourceBergen signed the United Nations Women’s Empowerment Principles, publicly and firmly committing to taking the necessary steps to advance gender equality and empower women in places of work and in communities around the world.

• AmerisourceBergen announced the launch of a supply chain elective course at Xavier University of Louisiana’s College of Pharmacy, a top-ranked historically Black university. The Advanced Pharmacy Practice Experience Pharmacy Distribution Leadership Rotation course exposes students to the interconnectivity between pharmaceutical supply chain stakeholders such as distributors, manufacturers, and providers, and gives students an understanding of its essential role in the delivery of patient care.

Fiscal Year 2022 Expectations

The Company does not provide forward-looking guidance on a GAAP basis as certain financial information, the probable significance of which cannot be determined, is not available or cannot be reasonably estimated. Please refer to the Supplemental Information Regarding Non-GAAP Financial Measures following the tables for additional information.

Fiscal Year 2022 Expectations on an Adjusted (non-GAAP) Basis

AmerisourceBergen is now updating its fiscal year 2022 financial guidance to reflect the stronger than expected performance of several of its businesses. While the contribution from COVID treatment distribution was higher than expected in the second quarter of fiscal 2022, the Company’s full year expectations from COVID treatment distribution are largely unchanged. The Company now expects:

• Adjusted Diluted Earnings Per Share to be in the range of $10.80 to $11.05, raised from the previous range of $10.60 to $10.90.

Additional expectations now include:

• Adjusted operating income to grow at least in the high-teens percent range, up from growth in the high-teens percent range;
  • U.S. Healthcare Solutions operating income to be in the range of $2.42 to $2.48 billion, representing growth of 7% to 10%, up from a range of $2.375 to $2.45 billion.

All other previously communicated aspects of the Company's fiscal year 2022 financial guidance and assumptions remain the same.

Dividend Declaration

The Company's Board of Directors declared a quarterly cash dividend of $0.46 per common share, payable May 31, 2022, to stockholders of record at the close of business on May 16, 2022.

Opioid Litigation

As previously disclosed, on April 2, 2022, a comprehensive settlement agreement to settle a substantial majority of opioid lawsuits filed by state and local governmental entities became effective. As of April 2, 2022, 46 of 49 eligible states, as well as the District of Columbia and all eligible territories, as well as over 98 percent of eligible subdivisions in the states, as calculated by population under the agreement, agreed to participate in the settlement. The Company will pay approximately $5.9 billion over 18 years and comply with other requirements, including the establishment of a clearinghouse that will consolidate data from all three national distributors. Additionally, on May 2, 2022, the Company and the two other national pharmaceutical distributors reached an agreement to pay up to $518 million in a settlement with the State of Washington and participating subdivisions to resolve opioid-related claims, consistent with Washington’s allocations under the comprehensive settlement agreement, as well as certain attorneys’ fees and costs. The Washington settlement agreement brings the number of States with whom the Company has recently settled opioid-related claims to 47 of 49 eligible states.

Conference Call & Slide Presentation

The Company will host a conference call to discuss the results at 8:30 a.m. ET on May 4, 2022. A slide presentation for investors has also been posted on the Company's website at investor.amerisourcebergen.com. Participating in the conference call will be:

• Steven H. Collis, Chairman, President & Chief Executive Officer
• James F. Cleary, Executive Vice President & Chief Financial Officer

The dial-in number for the live call will be (844) 200-6205. From outside the United States and Canada, dial +1 (929) 526-1599. The access code for the call will be 562752. The live call will also be webcast via the Company’s website at investor.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 investor.amerisourcebergen.com approximately one hour after the completion of the call and will remain available for one year. The telephone replay will also be available approximately one hour after the completion of the call and will remain available for seven days. To access the telephone replay from within the U.S. and Canada, dial (866) 813-9403. From outside the United States and Canada, dial +44 (204) 525-0658. The access code for the replay is 796214.

Upcoming Investor Events

AmerisourceBergen management will be attending the following investor events in the coming months:

• Bank of America Healthcare Conference, May 11, 2022;
• AmerisourceBergen Investor Day, June 1, 2022.

About AmerisourceBergen

AmerisourceBergen fosters a positive impact on the health of people and communities around the world by advancing the development and delivery of pharmaceuticals and healthcare products. As a leading global healthcare company, with a foundation in pharmaceutical distribution and solutions for manufacturers, pharmacies and providers, we create unparalleled access, efficiency and reliability for human and animal health. Our 42,000 global team members power our purpose: We are united in our responsibility to create healthier futures. AmerisourceBergen is ranked #8 on the Fortune 500 with more than $200 billion in annual revenue. Learn more at investor.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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Securities Exchange Act"). Words such as "expect," "likely," "outlook," "forecast," "would," "could," "should," "can," "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 changes in circumstances and speak only as of the date hereof. These statements are not guarantees of future performance and are based on assumptions and estimates 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: the effect of and uncertainties related to the ongoing COVID-19 pandemic (including any government responses thereto) and any continued recovery from the impact of the COVID-19 pandemic; our ability to achieve and maintain profitability in the future; our ability to respond to general economic conditions; our ability to manage our growth effectively and our expectations regarding the development and expansion of our business; the impact on our business of the regulatory environment and complexities with compliance; unfavorable trends in brand and generic pharmaceutical pricing, including in rate or frequency of price inflation or deflation; competition and industry consolidation of both customers and suppliers resulting in increasing pressure to reduce prices for our products and services; changes in the United States healthcare and regulatory environment, including changes that could impact prescription drug reimbursement under Medicare and Medicaid and declining reimbursement rates for pharmaceuticals; increasing governmental regulations regarding the pharmaceutical supply channel; continued federal and state government enforcement initiatives to detect and prevent suspicious orders of controlled substances and the diversion of controlled substances; continued prosecution or suit by federal and state governmental entities and other parties (including third-party payors, hospitals, hospital groups and individuals) of alleged violations of laws and regulations regarding controlled substances, and any related disputes, including shareholder derivative lawsuits; increased federal scrutiny and litigation, including qui tam litigation, for alleged violations of laws and regulations governing the marketing, sale, purchase and/or dispensing of pharmaceutical products or services, and associated reserves and costs; failure to comply with the Corporate Integrity Agreement; the outcome of any legal or governmental proceedings that may be instituted against us, including material adverse resolution of pending legal proceedings; 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; changes to customer or supplier payment terms, including as a result of the COVID-19 impact on such payment terms; the integration of the Alliance Healthcare businesses into the Company being more difficult, time consuming or costly than expected; the Company’s or Alliance Healthcare’s failure to achieve expected or targeted future financial and operating performance and results; the effects of disruption from the acquisition and related strategic transactions on the respective businesses of the Company and Alliance Healthcare and the fact that the acquisition and related strategic transactions may make it more difficult to establish or maintain relationships with employees, suppliers and other business partners; the acquisition of businesses, including the acquisition of the Alliance Healthcare businesses and related strategic transactions, that do not perform as expected, or that are difficult to integrate or control, or the inability to capture all of the anticipated synergies related thereto or to capture the anticipated synergies within the expected time period; risks associated with the strategic, long-term relationship between Walgreens Boots Alliance, Inc. and the Company, including with respect to the pharmaceutical distribution agreement and/or the global generic purchasing services arrangement; managing foreign expansion, including non-compliance with the U.S. Foreign Corrupt Practices Act, anti-bribery laws, economic sanctions and import laws and regulations; our ability to respond to financial market volatility and disruption; changes in tax laws or legislative initiatives that could adversely affect the Company's tax positions and/or the Company's tax liabilities or adverse resolution of challenges to the Company's tax positions; the loss, bankruptcy or insolvency of a major supplier, or substantial defaults in payment, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer, including as a result of COVID-19; financial and other impacts of COVID-19 on our operations or business continuity; changes to the customer or supplier mix; malfunction, failure or breach of sophisticated information systems to operate as designed, and risks generally associated with cybersecurity; risks generally associated with data privacy regulation and the international transfer of personal data; financial and other impacts of macroeconomic and geopolitical trends and events, including the unfolding situation in Russia and Ukraine and its regional and global ramifications; natural disasters or other unexpected events, such as additional pandemics, that affect the Company’s operations; the impairment of goodwill or other intangible assets (including any additional impairments with respect to foreign operations), resulting in a charge to earnings; the Company's ability to manage and complete divestitures; the disruption of the Company's cash flow and ability to return value to its stockholders in accordance with its past practices; interest rate and foreign currency exchange rate fluctuations; declining economic conditions in the United States and abroad; and other economic, business, competitive, legal, tax, regulatory and/or operational factors affecting the Company'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), in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021 and elsewhere in that report and (ii) in other reports filed by the Company pursuant to the Securities Exchange Act. The Company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by the federal securities laws."

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