COR Cencora Inc

Revenue of $79.1 Billion for the Fourth Quarter, a 14.7 Percent Year-Over-Year Increase

Fourth Quarter GAAP Diluted EPS of $0.02 and Adjusted Diluted EPS of $3.34

Revenue of $294.0 Billion for Fiscal Year 2024, a 12.1 Percent Year-Over-Year Increase

Fiscal Year 2024 GAAP Diluted EPS of $7.53 and Adjusted Diluted EPS of $13.76

Company increases its quarterly dividend by 8 percent

Cencora, Inc. (NYSE: COR) today reported that in its fiscal year 2024 fourth quarter ended September 30, 2024, revenue increased 14.7 percent to $79.1 billion. Revenue increased 12.1 percent to $294.0 billion for the fiscal year. On the basis of U.S. generally accepted accounting principles (GAAP), diluted earnings per share (EPS) was $0.02 for the September quarter of fiscal 2024, compared to $1.72 in the prior year quarter. Adjusted diluted EPS, which is a non-GAAP measure that excludes items described below, increased 16.8 percent to $3.34 in the fiscal fourth quarter. For fiscal year 2024, diluted EPS decreased 11.7 percent to $7.53. For fiscal year 2024, adjusted diluted EPS increased 14.8 percent to $13.76.

“Cencora took important steps forward in fiscal 2024 as we continued to evolve our global enterprise through the advancement of our pharmaceutical distribution capabilities and execute on our strategy,” said Bob Mauch, President and Chief Executive Officer of Cencora. “This morning's announcement of our acquisition of Retina Consultants of America furthers our ability to build on our leadership in specialty and deliver on our strategic imperatives. The strength of our business, value of our strategy and unparalleled expertise of our team members continues to drive Cencora's performance and results.”

“As we move into fiscal 2025, we are leading with a customer-centric approach, embracing an enterprise-powered mindset and a focus on learning to ensure we remain a differentiated healthcare solutions provider, both now and into the future,” Mr. Mauch continued. “Cencora is well positioned for continued growth and committed to long-term value creation for all our stakeholders as we continue to build on the critical role we play at the center of healthcare.”

Fourth Quarter Fiscal Year 2024 Summary Results

 

GAAP

Adjusted (Non-GAAP)

Revenue

$79.1B

$79.1B

Gross Profit

$2.5B

$2.5B

Operating Expenses

$2.4B

$1.6B

Operating Income

$127M

$851M

Interest Expense, Net

$21M

$21M

Effective Tax Rate

94.0%

20.3%

Net Income Attributable to Cencora

$3M

$662M

Diluted Earnings Per Share

$0.02

$3.34

Diluted Shares Outstanding

198.1M

198.1M

 

Below, Cencora presents descriptive summaries of the Company’s GAAP and adjusted (non-GAAP) quarterly and fiscal year 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.

Fourth Quarter GAAP Results

• Revenue: In the fourth quarter of fiscal 2024, revenue was $79.1 billion, up 14.7 percent compared to the same quarter in the previous fiscal year, reflecting a 15.7 percent increase in revenue within U.S. Healthcare Solutions and a 5.5 percent increase in revenue within International Healthcare Solutions.

• Gross Profit: Gross profit in the fourth quarter of fiscal 2024 was $2.5 billion, a 10.6 percent increase compared to the same period in the previous fiscal year primarily due to an increase in gross profit in the U.S. Healthcare Solutions segment, a decrease in LIFO expense, and a lower Turkey highly inflationary impact on inventory in the current year quarter. Gross profit as a percentage of revenue was 3.15 percent, a decline of 12 basis points from the prior year quarter due to the decline of U.S. Healthcare Solutions' gross profit margin primarily due to increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class, which have lower profit margins, and a lack of exclusive COVID-19 therapy sales, which had higher gross profit margins.

• Operating Expenses: In the fourth quarter of fiscal 2024, operating expenses were $2.4 billion, up 33.2 percent from the same period last fiscal year, primarily due to: (i) a $418 million goodwill impairment charge related to PharmaLex; (ii) an increase in distribution, selling, and administrative expenses to support our continued business growth; and (iii) an increase in litigation and opioid-related expense. Operating expenses as a percentage of revenue in the fiscal 2024 fourth quarter was 2.99 percent compared to 2.58 percent for the same period in the previous fiscal year.

• Operating Income: In the fourth quarter of fiscal 2024, operating income was $126.6 million, a 73.4 percent decrease compared to the same period in the previous fiscal year primarily due to the increase in operating expenses, offset in part by the increase in gross profit. Operating income as a percentage of revenue was 0.16 percent in the fourth quarter of fiscal 2024 compared to 0.69 percent for the same period in the previous fiscal year.

• Interest Expense, Net: In the fourth quarter of fiscal 2024, net interest expense of $21.0 million decreased 65.6 percent versus the prior year quarter due to an increase in interest income as a result of higher investment interest rates and higher average investment cash balances, and a decrease in interest expense driven by a decrease in interest expense at our European distribution business primarily due to decreased borrowings in Turkey and the September 2023 divestiture of our less-than-wholly-owned subsidiary in Egypt.

• Effective Tax Rate: The effective tax rate was 94.0 percent for the fourth quarter of fiscal 2024 primarily due to the PharmaLex goodwill impairment, which is largely not deductible for income tax purposes. The effective tax rate was 21.8 percent in the prior year quarter.

• Diluted Earnings Per Share: Diluted earnings per share was $0.02 in the fourth quarter of fiscal 2024, a 98.8 percent decrease compared to the previous fiscal year's fourth quarter.

• Diluted Shares Outstanding: Diluted weighted average shares outstanding for the fourth quarter of fiscal 2024 were 198.1 million, a decrease of 2.6 percent versus the prior fiscal year fourth quarter primarily due to share repurchases.

Fourth Quarter Adjusted (non-GAAP) Results

• Revenue: No adjustments were made to the GAAP presentation of revenue. In the fourth quarter of fiscal 2024, revenue was $79.1 billion, up 14.7 percent compared to the same quarter in the previous fiscal year, reflecting a 15.7 percent increase in revenue within U.S. Healthcare Solutions and a 5.5 percent increase in revenue within International Healthcare Solutions.

• Adjusted Gross Profit: Adjusted gross profit in the fourth quarter of fiscal 2024 was $2.5 billion, a 6.6 percent increase compared to the same period in the previous fiscal year primarily due to an increase in gross profit in the U.S. Healthcare Solutions segment. Adjusted gross profit as a percentage of revenue was 3.10 percent in the fiscal 2024 fourth quarter, a decline of 24 basis points when compared to the prior year quarter due to the decline of U.S. Healthcare Solutions' gross profit margin primarily due to increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class, which have lower profit margins, and a lack of exclusive COVID-19 therapy sales, which had higher gross profit margins.

• Adjusted Operating Expenses: In the fourth quarter of fiscal 2024, adjusted operating expenses were $1.6 billion, a 6.8 percent increase compared to the same period in the previous fiscal year primarily due to an increase in distribution, selling, and administrative expenses to support our continued business growth. Adjusted operating expenses as a percentage of revenue in the fiscal 2024 fourth quarter was 2.03 percent, a decline of 15 basis points when compared to the prior year quarter.

• Adjusted Operating Income: In the fourth quarter of fiscal 2024, adjusted operating income was $851.1 million, a 6.3 percent increase compared to the same period in the prior fiscal year, driven by a 10.2 percent increase in U.S. Healthcare Solutions, partially offset by an 8.6 percent decrease in International Healthcare Solutions. Adjusted operating income as a percentage of revenue was 1.08 percent in the fiscal 2024 fourth quarter, a decline of 8 basis points when compared to the prior year quarter.

• Interest Expense, Net: No adjustments were made to the GAAP presentation of net interest expense. In the fourth quarter of fiscal 2024, net interest expense of $21.0 million decreased 65.6 percent versus the prior year quarter due to an increase in interest income as a result of higher investment interest rates and higher average investment cash balances, and a decrease in interest expense driven by a decrease in interest expense at our European distribution business primarily due to decreased borrowings in Turkey and the September 2023 divestiture of our less-than-wholly-owned subsidiary in Egypt.

• Adjusted Effective Tax Rate: The adjusted effective tax rate was 20.3 percent for the fourth quarter of fiscal 2024 compared to 21.6 percent in the prior year quarter.

• Adjusted Diluted Earnings Per Share: Adjusted diluted earnings per share was $3.34 in the fourth quarter of fiscal 2024, a 16.8 percent increase compared to $2.86 in the previous fiscal year fourth quarter.

• Diluted Shares Outstanding: No adjustments were made to the GAAP presentation of diluted shares outstanding. Diluted weighted average shares outstanding for the fourth quarter of fiscal 2024 were 198.1 million, a decrease of 2.6 percent versus the prior fiscal year fourth quarter primarily due to share repurchases.

Segment Discussion

The Company is organized geographically based upon the products and services it provides to its customers under two reportable segments: U.S. Healthcare Solutions and International Healthcare Solutions.

U.S. Healthcare Solutions Segment

U.S. Healthcare Solutions revenue was $71.7 billion in the fourth quarter of fiscal 2024, an increase of 15.7 percent compared to the same quarter in the previous fiscal year primarily due to overall market growth primarily driven by unit volume growth, including increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class, and increased sales of specialty products to physician practices and health systems. Segment operating income of $697.4 million in the fourth quarter of fiscal 2024 was up 10.2 percent compared to the same period in the previous fiscal year due to an increase in gross profit, offset in part by an increase in operating expenses.

International Healthcare Solutions Segment

International Healthcare Solutions revenue was $7.4 billion in the fourth quarter of fiscal 2024, an increase of 5.5 percent compared to the same period in the prior fiscal year. Segment operating income in the fourth quarter of fiscal 2024 was $153.7 million, a decrease of 8.6 percent, primarily due to higher information technology expenses in our European distribution business and lower operating income at our Canadian business, partially offset by the higher operating income at our global specialty logistics business. On a constant currency basis, International Healthcare Solutions revenue increased by 7.9 percent and operating income decreased by 8.0 percent.

Fiscal Year 2024 Summary Results

 

GAAP

Adjusted (non-GAAP)

Revenue

$294.0B

$294.0B

Gross Profit

$9.9B

$9.7B

Operating Expenses

$7.7B

$6.1B

Operating Income

$2.2B

$3.6B

Interest Expense, Net

$157M

$157M

Effective Tax Rate

24.2%

20.8%

Net Income Attributable to Cencora

$1.5B

$2.8B

Diluted Earnings Per Share

$7.53

$13.76

Diluted Shares Outstanding

200.3M

200.3M

 

Summary Fiscal Year GAAP Results

In fiscal year 2024, GAAP diluted EPS was $7.53 compared to $8.53 in the prior fiscal year. Revenue increased 12.1 percent from the prior fiscal year to $294.0 billion. Gross profit increased 10.6 percent to $9.9 billion due to increases in gross profit in both reportable segments, and a LIFO credit in the current fiscal year in comparison to a LIFO expense in the prior fiscal year, offset in part by lower gains from antitrust litigation settlements. Operating expenses increased 16.9 percent largely due to a $418.0 million goodwill impairment related to PharmaLex and increases in (i) distribution, selling, and administrative expenses, (ii) litigation and opioid-related expenses, which was a credit in the prior year fiscal year due to the receipt of funds previously held in an opioid indemnity escrow account, and (iii) amortization expense. Operating income decreased 7.1 percent due to the increase in operating expenses, offset in part by the increase in gross profit. Diluted weighted average shares outstanding in fiscal 2024 were 200.3 million, down 2.1 percent from the prior fiscal year primarily due to share repurchases.

Summary Fiscal Year Adjusted (non-GAAP) Results

In fiscal year 2024, adjusted diluted EPS was $13.76 compared to $11.99 in the prior fiscal year. Revenue increased 12.1 percent to $294.0 billion. Adjusted gross profit increased 8.1 percent to $9.7 billion due to the increases in gross profit in both reportable segments. Adjusted operating expenses increased 6.5 percent to $6.1 billion primarily due to an increase in distribution, selling, and administrative expenses. Adjusted operating income increased 10.9 percent to $3.6 billion due to the increase in gross profit, offset in part by increased operating expenses. Adjusted operating income margin decreased by 1 basis point to 1.24 percent.

Recent Company Highlights & Milestones

• Cencora today announced that it has entered into a definitive agreement to acquire Retina Consultants of America (“RCA”), a leading management services organization (MSO) of retina specialists.
• Cencora completed its leadership succession plan on October 1, 2024. Robert P. Mauch, PharmD, PhD assumed the role of President and Chief Executive Officer and joined the Company’s Board of Directors. Steven H. Collis, who retired from his role as President and Chief Executive Officer of the Company, has transitioned to Executive Chairman of the Cencora Board of Directors.
• Cencora announced the appointment of Francois Mandeville to its executive team as Executive Vice President, Strategy and M&A.
• Cencora announced the appointment of Pawan Verma to its executive team as Executive Vice President and Chief Data and Information Officer.
• Cencora celebrated its third annual Global Inclusion Day and re-committed its promise to disability inclusion with Robert Mauch signing the Disability:IN CEO Letter on Disability Inclusion for the second consecutive year.

Dividend Declaration

On November 5, 2024, the Company's Board of Directors declared a quarterly dividend of $0.55 per common share, an 8 percent increase in its quarterly dividend rate from $0.51 per common share. The quarterly dividend of $0.55 per common share is payable November 29, 2024, to stockholders of record at the close of business on November 15, 2024.

Fiscal Year 2025 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 and cannot be reasonably estimated. Please refer to the Supplemental Information Regarding Non-GAAP Financial Measures following the tables for additional information.

Fiscal Year 2025 Expectations on an Adjusted (non-GAAP) Basis

Cencora has introduced its full fiscal year 2025 financial guidance, which reflects adjusted operating income growth of 5 percent to 6.5 percent and adjusted diluted EPS growth of 8 percent to 10 percent. Since the Company’s preliminary fiscal 2025 guidance provided on its Form 8-K filed on September 5, 2024, Cencora has executed on opportunistic share repurchases in September and October and had continued momentum in the business. The Company expects:

• Revenue growth to be in the range of 7 to 9 percent;
  • U.S. Healthcare Solutions segment revenue growth to be in the range of 7 to 9 percent;
  • International Healthcare Solutions segment revenue growth to be in the range of 7 to 9 percent;
• Adjusted diluted earnings per share to be in the range of $14.80 to $15.10.

Additional expectations include:

• Adjusted operating income growth to be in the range of 5 to 6.5 percent;
  • U.S. Healthcare Solutions segment operating income growth to be in the range of 5 to 6.5 percent;
  • International Healthcare Solutions segment operating income growth to be in the range of 5 to 6.5 percent;
• Interest expense to be in the range of $150 million to $170 million;
• Adjusted effective tax rate of approximately 21 percent;
• Adjusted free cash flow to be in the range of $2.0 billion to $3.0 billion;
• Capital expenditures to be approximately $600 million; and
• Weighted average diluted shares outstanding to be approximately 196 million.

Cencora’s fiscal 2025 guidance does not currently include the impact of the RCA acquisition, which will be incorporated into expectations following the transaction close.

For additional details regarding guidance expectations on a constant currency basis, please refer to our slide presentation for investors.

Conference Call & Slide Presentation

The Company will host a conference call to discuss the results at 8:30 a.m. ET on November 6, 2024. A slide presentation for investors has also been posted on the Company's website at investor.cencora.com. The dial-in number for the live call will be (833) 470-1428. From outside the United States and Canada, dial +1 (404) 975-4839. The access code for the call will be 272044. The live call will also be webcast via the Company’s website at investor.cencora.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.cencora.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 U.S. and Canada, dial +1 (929) 458-6194. The access code for the replay is 260569.

Upcoming Investor Events

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

• Evercore ISI Healthcare Conference, December 3-5, 2024;
• Citi Global Healthcare Conference, December 3-6, 2024; and
• J.P. Morgan Healthcare Conference, January 13-16, 2025.

Please check the website for updates regarding the timing of the live presentation webcasts, if any, and for replay information.

About Cencora

Cencora is a leading global pharmaceutical solutions organization centered on improving the lives of people and animals around the world. We partner with pharmaceutical innovators across the value chain to facilitate and optimize market access to therapies. Care providers depend on us for the secure, reliable delivery of pharmaceuticals, healthcare products, and solutions. Our 46,000+ worldwide team members contribute to positive health outcomes through the power of our purpose: We are united in our responsibility to create healthier futures . Cencora is ranked #10 on the Fortune 500 and #24 on the Global Fortune 500 with more than $290 billion in annual revenue. Learn more at investor.cencora.com.

Cencora’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 "aim," "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "intend," "may," "might," "on track," "opportunity," "plan," "possible," "potential," "predict," "project,” "seek," "should," "strive," "sustain," "synergy," "target," "will," "would" and similar expressions are intended to identify such forward-looking statements, but the absence of these words does not mean the statement is not forward-looking. 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. A more detailed discussion of the risks and uncertainties that could cause our actual results to differ materially from those indicated is included (i) in the "Risk Factors" and "Management's Discussion and Analysis" sections in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023 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.

 

CENCORA, INC. FINANCIAL SUMMARY (in thousands, except per share data) (unaudited)

   

 

 

Three Months Ended September 30, 2024

 

% of Revenue

 

Three Months Ended September 30, 2023

 

% of Revenue

 

% Change

Revenue

 

$

79,050,106

 

 

 

$

68,922,331

 

 

 

14.7%

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

76,557,689

 

 

 

 

66,668,879

 

 

 

14.8%

 

 

 

 

 

 

 

 

 

 

 

Gross profit 1

 

 

2,492,417

 

3.15%

 

 

2,253,452

 

3.27%

 

10.6%

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Distribution, selling, and administrative

 

 

1,490,343

 

1.89%

 

 

1,393,828

 

2.02%

 

6.9%

Depreciation and amortization

 

 

277,044

 

0.35%

 

 

276,226

 

0.40%

 

0.3%

Litigation and opioid-related expenses 2

 

 

65,517

 

 

 

 

13,890

 

 

 

 

Acquisition-related deal and integration expenses

 

 

33,570

 

 

 

 

40,291

 

 

 

 

Restructuring and other expenses

 

 

81,304

 

 

 

 

52,276

 

 

 

 

Goodwill impairment 3

 

 

418,000

 

 

 

 

—

 

 

 

 

Total operating expenses

 

 

2,365,778

 

2.99%

 

 

1,776,511

 

2.58%

 

33.2%

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

126,639

 

0.16%

 

 

476,941

 

0.69%

 

(73.4)%

 

 

 

 

 

 

 

 

 

 

 

Other income, net 4

 

 

(19,507)

 

 

 

 

(30,424)

 

 

 

 

Interest expense, net

 

 

20,969

 

 

 

 

60,942

 

 

 

(65.6)%

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

125,177

 

0.16%

 

 

446,423

 

0.65%

 

(72.0)%

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

117,711

 

 

 

 

97,443

 

 

 

20.8%

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

7,466

 

0.01%

 

 

348,980

 

0.51%

 

(97.9)%

 

 

 

 

 

 

 

 

 

 

 

Net (income) loss attributable to noncontrolling interests

 

 

(4,084)

 

 

 

 

1,585

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Cencora, Inc.

 

$

3,382

 

—%

 

$

350,565

 

0.51%

 

(99.0)%

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.02

 

 

 

$

1.74

 

 

 

(98.9)%

Diluted

 

$

0.02

 

 

 

$

1.72

 

 

 

(98.8)%

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

196,270

 

 

 

 

201,338

 

 

 

(2.5)%

Diluted

 

 

198,082

 

 

 

 

203,395

 

 

 

(2.6)%

________________________________________

1

Includes a $62.3 million gain from antitrust litigation settlements, a $12.3 million LIFO expense, and Turkey foreign currency remeasurement expense of $10.2 million in the three months ended September 30, 2024. Includes a $70.6 million gain from antitrust litigation settlements, a $90.3 million LIFO expense, and Turkey foreign currency remeasurement expense of $27.9 million in the three months ended September 30, 2023.

 

2

Includes a $49.1 million litigation accrual in the three months ended September 30, 2024.

 

3

Represents a goodwill impairment charge related to PharmaLex in the three months ended September 30, 2024.

 

4

Includes a $40.7 million gain on the divestiture of non-core businesses in the three months September 30, 2023.

 

CENCORA, INC. FINANCIAL SUMMARY (in thousands, except per share data) (unaudited)

   

 

 

Fiscal Year Ended September 30, 2024

 

% of Revenue

 

Fiscal Year Ended September 30, 2023

 

% of Revenue

 

% Change

Revenue

 

$

293,958,599

 

 

 

$

262,173,411

 

 

 

12.1%

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

284,048,570

 

 

 

 

253,213,918

 

 

 

12.2%

 

 

 

 

 

 

 

 

 

 

 

Gross profit 1

 

 

9,910,029

 

3.37%

 

 

8,959,493

 

3.42%

 

10.6%

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Distribution, selling, and administrative

 

 

5,661,106

 

1.93%

 

 

5,309,984

 

2.03%

 

6.6%

Depreciation and amortization

 

 

1,091,974

 

0.37%

 

 

963,904

 

0.37%

 

13.3%

Litigation and opioid-related expenses (credit), net 2

 

 

227,070

 

 

 

 

(24,693)

 

 

 

 

Acquisition-related deal and integration expenses

 

 

103,001

 

 

 

 

139,683

 

 

 

 

Restructuring and other expenses

 

 

233,629

 

 

 

 

229,884

 

 

 

 

Goodwill impairment 3

 

 

418,000

 

 

 

 

—

 

 

 

 

Total operating expenses

 

 

7,734,780

 

2.63%

 

 

6,618,762

 

2.52%

 

16.9%

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

2,175,249

 

0.74%

 

 

2,340,731

 

0.89%

 

(7.1)%

 

 

 

 

 

 

 

 

 

 

 

Other loss (income), net 4

 

 

14,283

 

 

 

 

(49,036)

 

 

 

 

Interest expense, net

 

 

156,991

 

 

 

 

228,931

 

 

 

(31.4)%

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

2,003,975

 

0.68%

 

 

2,160,836

 

0.82%

 

(7.3)%

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

484,702

 

 

 

 

428,260

 

 

 

13.2%

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

1,519,273

 

0.52%

 

 

1,732,576

 

0.66%

 

(12.3)%

 

 

 

 

 

 

 

 

 

 

 

Net (income) loss attributable to noncontrolling interests

 

 

(10,153)

 

 

 

 

12,717

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Cencora, Inc.

 

$

1,509,120

 

0.51%

 

$

1,745,293

 

0.67%

 

(13.5)%

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

Basic

 

$

7.60

 

 

 

$

8.62

 

 

 

(11.8)%

Diluted

 

$

7.53

 

 

 

$

8.53

 

 

 

(11.7)%

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

198,503

 

 

 

 

202,511

 

 

 

(2.0)%

Diluted

 

 

200,284

 

 

 

 

204,591

 

 

 

(2.1)%

________________________________________

1

Includes a $170.9 million gain from antitrust litigation settlements, a $52.2 million LIFO credit, and Turkey foreign currency remeasurement expense of $54.1 million in the fiscal year ended September 30, 2024. Includes a $239.1 million gain from antitrust litigation settlements, a $204.6 million LIFO expense, and Turkey foreign currency remeasurement expense of $87.0 million in the fiscal year ended September 30, 2023.

 

2

The fiscal year ended September 30, 2024 includes $263.1 million of litigation accruals, offset in part by a $92.2 million opioid settlement accrual reduction primarily as a result of the Company's prepayment of the net present value of a future obligation as permitted under its opioid settlement agreements. The fiscal year ended September 30, 2023 includes the receipt of $83.4 million from the H.D. Smith opioid litigation indemnity escrow.

 

3

Represents a goodwill impairment charge related to PharmaLex in the fiscal year ended September 30, 2024.

 

4

Includes a $40.7 million gain on the divestiture of non-core businesses in the fiscal year ended September 30, 2023.

 

CENCORA, INC. GAAP TO NON-GAAP RECONCILIATIONS (in thousands, except per share data) (unaudited)

   

 

 

Three Months Ended September 30, 2024

 

 

Gross Profit

 

Operating Expenses

 

Operating Income

 

Income Before Income Taxes

 

Income Tax Expense

 

Net Income Attributable to Cencora

 

Diluted Earnings Per Share

GAAP

 

$

2,492,417

 

$

2,365,778

 

$

126,639

 

$

125,177

 

$

117,711

 

$

3,382

 

$

0.02

Gains from antitrust litigation settlements

 

 

(62,337)

 

 

—

 

 

(62,337)

 

 

(62,337)

 

 

(11,013)

 

 

(51,324)

 

 

(0.26)

LIFO expense

 

 

12,273

 

 

—

 

 

12,273

 

 

12,273

 

 

4,369

 

 

7,904

 

 

0.04

Turkey highly inflationary impact

 

 

10,172

 

 

—

 

 

10,172

 

 

10,645

 

 

—

 

 

10,645

 

 

0.05

Acquisition-related intangibles amortization

 

 

—

 

 

(165,919)

 

 

165,919

 

 

165,919

 

 

24,045

 

 

141,441

 

 

0.71

Litigation and opioid-related expenses

 

 

—

 

 

(65,517)

 

 

65,517

 

 

65,517

 

 

2,670

 

 

62,847

 

 

0.32

Acquisition-related deal and integration expenses

 

 

—

 

 

(33,570)

 

 

33,570

 

 

33,570

 

 

5,649

 

 

27,921

 

 

0.14

Restructuring and other expenses

 

 

—

 

 

(81,304)

 

 

81,304

 

 

81,304

 

 

14,858

 

 

66,446

 

 

0.34

Goodwill impairment

 

 

—

 

 

(418,000)

 

 

418,000

 

 

418,000

 

 

3,705

 

 

414,295

 

 

2.09

Gain on remeasurement of equity investment

 

 

—

 

 

—

 

 

—

 

 

(8,551)

 

 

—

 

 

(8,551)

 

 

(0.04)

Other, net

 

 

—

 

 

—

 

 

—

 

 

5,804

 

 

1,634

 

 

4,170

 

 

0.02

Tax reform 1

 

 

—

 

 

—

 

 

—

 

 

(11,706)

 

 

5,822

 

 

(17,528)

 

 

(0.09)

Adjusted Non-GAAP

 

$

2,452,525

 

$

1,601,468

 

$

851,057

 

$

835,615

 

$

169,450

 

$

661,648

 

$

3.34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Non-GAAP % change vs. prior year quarter

 

6.6%

 

6.8%

 

6.3%

 

12.8%

 

5.6%

 

13.9%

 

16.8%

 

Percentages of Revenue:

GAAP

 

Adjusted Non-GAAP

Gross profit

3.15%

 

3.10%

Operating expenses

2.99%

 

2.03%

Operating income

0.16%

 

1.08%

________________________________________

1

Includes tax expense relating to 2020 Swiss tax reform and the currency remeasurement of the related deferred tax assets, the latter of which is recorded within Other Income, Net.

  Note: For more information related to non-GAAP financial measures, refer to the section titled "Supplemental Information Regarding Non-GAAP Financial Measures" of this release.  

CENCORA, INC. GAAP TO NON-GAAP RECONCILIATIONS (in thousands, except per share data) (unaudited)

   

 

 

Three Months Ended September 30, 2023

 

 

Gross Profit

 

Operating Expenses

 

Operating Income

 

Income Before Income Taxes

 

Income Tax Expense

 

Net Income Attributable to Cencora

 

Diluted Earnings Per Share

GAAP

 

$

2,253,452

 

$

1,776,511

 

$

476,941

 

$

446,423

 

$

97,443

 

$

350,565

 

$

1.72

Gains from antitrust litigation settlements

 

 

(70,582)

 

 

—

 

 

(70,582)

 

 

(70,582)

 

 

(16,719)

 

 

(53,863)

 

 

(0.26)

LIFO expense

 

 

90,323

 

 

—

 

 

90,323

 

 

90,323

 

 

21,264

 

 

69,059

 

 

0.34

Turkey highly inflationary impact

 

 

27,948

 

 

—

 

 

27,948

 

 

29,916

 

 

—

 

 

29,916

 

 

0.15

Acquisition-related intangibles amortization

 

 

—

 

 

(169,900)

 

 

169,900

 

 

169,900

 

 

40,214

 

 

128,718

 

 

0.63

Litigation and opioid-related expenses

 

 

—

 

 

(13,890)

 

 

13,890

 

 

13,890

 

 

3,305

 

 

10,585

 

 

0.05

Acquisition-related deal and integration expenses

 

 

—

 

 

(40,291)

 

 

40,291

 

 

40,291

 

 

9,548

 

 

30,743

 

 

0.15

Restructuring and other expenses

 

 

—

 

 

(52,276)

 

 

52,276

 

 

52,276

 

 

12,452

 

 

39,824

 

 

0.20

Gain on divestiture of non-core businesses

 

 

—

 

 

—

 

 

—

 

 

(40,665)

 

 

1,035

 

 

(41,700)

 

 

(0.21)

Other, net

 

 

—

 

 

—

 

 

—

 

 

4,310

 

 

781

 

 

3,529

 

 

0.02

Tax reform 1

 

 

—

 

 

—

 

 

—

 

 

4,824

 

 

(8,931)

 

 

13,755

 

 

0.07

Adjusted Non-GAAP

 

$

2,301,141

 

$

1,500,154

 

$

800,987

 

$

740,906

 

$

160,392

 

$

581,131

 

$

2.86

 

Percentages of Revenue:

GAAP

Adjusted Non-GAAP

Gross profit

3.27%

 

3.34%

Operating expenses

2.58%

 

2.18%

Operating income

0.69%

 

1.16%

______________________________________

1

Includes tax expense relating to Swiss tax reform and the currency remeasurement of the related deferred tax assets, the latter of which is recorded within Other Income, Net.

 

Note: For more information related to non-GAAP financial measures, refer to the section titled "Supplemental Information Regarding Non-GAAP Financial Measures" of this release.  

CENCORA, INC. GAAP TO NON-GAAP RECONCILIATIONS (in thousands, except per share data) (unaudited)

   

 

 

Fiscal Year Ended September 30, 2024

 

 

 

Gross Profit

 

Operating Expenses

 

Operating Income

 

Income Before Income Taxes

 

Income Tax Expense

 

Net Income Attributable to Cencora

 

Diluted Earnings Per Share

 

GAAP

 

$

9,910,029

 

$

7,734,780

 

$

2,175,249

 

$

2,003,975

 

$

484,702

 

$

1,509,120

 

$

7.53

 

Gains from antitrust litigation settlements

 

 

(170,904)

 

 

—

 

 

(170,904)

 

 

(170,904)

 

 

(37,823)

 

 

(133,081)

 

 

(0.66)

 

LIFO credit

 

 

(52,168)

 

 

—

 

 

(52,168)

 

 

(52,168)

 

 

(11,545)

 

 

(40,623)

 

 

(0.20)

 

Turkey highly inflationary impact

 

 

54,087

 

 

—

 

 

54,087

 

 

55,309

 

 

—

 

 

55,309

 

 

0.28

 

Acquisition-related intangibles amortization

 

 

—

 

 

(660,292)

 

 

660,292

 

 

660,292

 

 

146,131

 

 

512,426

 

 

2.56

 

Litigation and opioid-related expenses, net

 

 

—

 

 

(227,070)

 

 

227,070

 

 

227,070

 

 

46,546

 

 

180,524

 

 

0.90

 

Acquisition-related deal and integration expenses

 

 

—

 

 

(103,001)

 

 

103,001

 

 

103,001

 

 

22,795

 

 

80,206

 

 

0.40

 

Restructuring and other expenses

 

 

—

 

 

(233,629)

 

 

233,629

 

 

233,629

 

 

48,480

 

 

185,149

 

 

0.92

 

Goodwill impairment

 

 

—

 

 

(418,000)

 

 

418,000

 

 

418,000

 

 

3,705

 

 

414,295

 

 

2.07

 

Loss on remeasurement of equity investment

 

 

—

 

 

—

 

 

—

 

 

16,201

 

 

—

 

 

16,201

 

 

0.08

 

Other, net

 

 

—

 

 

—

 

 

—

 

 

16,814

 

 

3,261

 

 

13,553

 

 

0.07

 

Tax reform and discrete tax items 1

 

 

—

 

 

—

 

 

—

 

 

(15,697)

 

 

20,811

 

 

(36,508)

 

 

(0.18)

 

Adjusted Non-GAAP

 

$

9,741,044

 

$

6,092,788

 

$

3,648,256

 

$

3,495,522

 

$

727,063

 

$

2,756,571

 

$

13.76

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Non-GAAP % change vs. prior year

 

8.1%

 

6.5%

 

10.9%

 

14.0%

 

17.0%

 

12.4%

 

14.8%

 

 

Percentages of Revenue:

GAAP

Adjusted Non-GAAP

Gross profit

3.37%

 

3.31%

Operating expenses

2.63%

 

2.07%

Operating income

0.74%

 

1.24%

________________________________________

1

Includes a tax benefit attributable to an adjustment of the Swiss valuation allowance (due to an increase in projected Swiss income and DTA utilization), tax expense relating to 2020 Swiss tax reform, and the currency remeasurement of the related deferred tax assets, the latter of which is recorded within Other Loss (Income), Net.

 

2

The sum of the components does not equal the total due to rounding.

 

Note: For more information related to non-GAAP financial measures, refer to the section titled "Supplemental Information Regarding Non-GAAP Financial Measures" of this release.  

CENCORA, INC. GAAP TO NON-GAAP RECONCILIATIONS (in thousands, except per share data) (unaudited)

   

 

 

Fiscal Year Ended September 30, 2023

 

 

 

Gross Profit

 

Operating Expenses

 

Operating Income

 

Income Before Income Taxes

 

Income Tax Expense

 

Net Income Attributable to Cencora

 

Diluted Earnings Per Share

 

GAAP

 

$

8,959,493

 

$

6,618,762

 

$

2,340,731

 

$

2,160,836

 

$

428,260

 

$

1,745,293

 

$

8.53

 

Gains from antitrust litigation settlements

 

 

(239,092)

 

 

—

 

 

(239,092)

 

 

(239,092)

 

 

(55,894)

 

 

(183,198)

 

 

(0.90)

 

LIFO expense

 

 

204,595

 

 

—

 

 

204,595

 

 

204,595

 

 

47,830

 

 

156,765

 

 

0.77

 

Turkey highly inflationary impact

 

 

86,967

 

 

—

 

 

86,967

 

 

95,938

 

 

—

 

 

95,938

 

 

0.47

 

Acquisition-related intangibles amortization

 

 

—

 

 

(551,046)

 

 

551,046

 

 

551,046

 

 

128,823

 

 

418,144

 

 

2.04

 

Litigation and opioid-related credit, net

 

 

—

 

 

24,693

 

 

(24,693)

 

 

(24,693)

 

 

13,717

 

 

(38,410)

 

 

(0.19)

 

Acquisition-related deal and integration expenses

 

 

—

 

 

(139,683)

 

 

139,683

 

 

139,683

 

 

32,655

 

 

107,028

 

 

0.52

 

Restructuring and other expenses

 

 

—

 

 

(229,884)

 

 

229,884

 

 

229,884

 

 

53,742

 

 

176,142

 

 

0.86

 

Gain on divestiture of non-core businesses

 

 

—

 

 

—

 

 

—

 

 

(40,665)

 

 

1,035

 

 

(41,700)

 

 

(0.20)

 

Other, net

 

 

—

 

 

—

 

 

—

 

 

(5,501)

 

 

781

 

 

(6,282)

 

 

(0.03)

 

Tax reform 1

 

 

—

 

 

—

 

 

—

 

 

(6,638)

 

 

(29,287)

 

 

22,649

 

 

0.11

 

Adjusted Non-GAAP

 

$

9,011,963

 

$

5,722,842

 

$

3,289,121

 

$

3,065,393

 

$

621,662

 

$

2,452,369

 

$

11.99

2

 

Percentages of Revenue:

GAAP

 

 

Adjusted Non-GAAP

Gross profit

3.42%

 

 

3.44%

Operating expenses

2.52%

 

 

2.18%

Operating income

0.89%

 

 

1.25%

________________________________________

1

Tax expense relating to 2020 Swiss tax reform and the currency remeasurement of the related deferred tax assets, the latter of which is recorded within Other Loss (Income), Net.

 

2

The sum of the components does not equal the total due to rounding.

 

Note: For more information related to non-GAAP financial measures, refer to the section titled "Supplemental Information Regarding Non-GAAP Financial Measures" of this release.  

CENCORA, INC. SUMMARY SEGMENT INFORMATION (dollars in thousands) (unaudited)

   

 

 

Three Months Ended September 30,

Revenue

 

 

2024

 

 

2023

 

% Change

U.S. Healthcare Solutions

 

$

71,671,130

 

$

61,928,984

 

15.7%

International Healthcare Solutions

 

 

7,382,054

 

 

6,994,689

 

5.5%

Intersegment eliminations

 

 

(3,078)

 

 

(1,342)

 

 

 

 

 

 

 

 

Revenue

 

$

79,050,106

 

$

68,922,331

 

14.7%

 

 

 

 

Three Months Ended September 30,

Operating income

 

 

2024

 

 

2023

 

% Change

U.S. Healthcare Solutions

 

$

697,384

 

$

632,830

 

10.2%

International Healthcare Solutions

 

 

153,673

 

 

168,157

 

(8.6)%

Total segment operating income

 

 

851,057

 

 

800,987

 

6.3%

 

 

 

 

 

 

 

Gains from antitrust litigation settlements

 

 

62,337

 

 

70,582

 

 

LIFO expense

 

 

(12,273)

 

 

(90,323)

 

 

Turkey highly inflationary impact

 

 

(10,172)

 

 

(27,948)

 

 

Acquisition-related intangibles amortization

 

 

(165,919)

 

 

(169,900)

 

 

Litigation and opioid-related expenses

 

 

(65,517)

 

 

(13,890)

 

 

Acquisition-related deal and integration expenses

 

 

(33,570)

 

 

(40,291)

 

 

Restructuring and other expenses

 

 

(81,304)

 

 

(52,276)

 

 

Goodwill impairment

 

 

(418,000)

 

 

—

 

 

Operating income

 

$

126,639

 

$

476,941

 

(73.4)%

 

 

 

 

 

 

 

Percentages of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Healthcare Solutions

 

 

 

 

 

 

Gross profit

 

 

2.27%

 

 

2.38%

 

 

Operating expenses

 

 

1.29%

 

 

1.36%

 

 

Operating income

 

 

0.97%

 

 

1.02%

 

 

 

 

 

 

 

 

 

International Healthcare Solutions

 

 

 

 

 

 

Gross profit

 

 

11.22%

 

 

11.84%

 

 

Operating expenses

 

 

9.14%

 

 

9.43%

 

 

Operating income

 

 

2.08%

 

 

2.40%

 

 

 

 

 

 

 

 

 

Cencora, Inc. (GAAP)

 

 

 

 

 

 

Gross profit

 

 

3.15%

 

 

3.27%

 

 

Operating expenses

 

 

2.99%

 

 

2.58%

 

 

Operating income

 

 

0.16%

 

 

0.69%

 

 

 

 

 

 

 

 

 

Cencora, Inc. (Non-GAAP)

 

 

 

 

 

 

Adjusted gross profit

 

 

3.10%

 

 

3.34%

 

 

Adjusted operating expenses

 

 

2.03%

 

 

2.18%

 

 

Adjusted operating income

 

 

1.08%

 

 

1.16%

 

 

 

Note: For more information related to non-GAAP financial measures, refer to the section titled "Supplemental Information Regarding Non-GAAP Financial Measures" of this release.

 

CENCORA, INC. SUMMARY SEGMENT INFORMATION (dollars in thousands) (unaudited)

   

 

 

Fiscal Year Ended September 30,

Revenue

 

2024

 

2023

 

% Change

U.S. Healthcare Solutions

 

$

265,339,427

 

$

234,759,218

 

13.0%

International Healthcare Solutions

 

 

28,627,542

 

 

27,418,679

 

4.4%

Intersegment eliminations

 

 

(8,370)

 

 

(4,486)

 

 

 

 

 

 

 

 

Revenue

 

$

293,958,599

 

$

262,173,411

 

12.1%

   

 

 

Fiscal Year Ended September 30,

Operating income

 

2024

 

2023

 

% Change

U.S. Healthcare Solutions

 

$

2,934,877

 

$

2,596,559

 

13.0%

International Healthcare Solutions

 

 

713,379

 

 

692,562

 

3.0%

Total segment operating income

 

 

3,648,256

 

 

3,289,121

 

10.9%

 

 

 

 

 

 

 

Gains from antitrust litigation settlements

 

 

170,904

 

 

239,092

 

 

LIFO credit (expense)

 

 

52,168

 

 

(204,595)

 

 

Turkey highly inflationary impact

 

 

(54,087)

 

 

(86,967)

 

 

Acquisition-related intangibles amortization

 

 

(660,292)

 

 

(551,046)

 

 

Litigation and opioid-related (expenses) credit, net

 

 

(227,070)

 

 

24,693

 

 

Acquisition-related deal and integration expenses

 

 

(103,001)

 

 

(139,683)

 

 

Restructuring and other expenses

 

 

(233,629)

 

 

(229,884)

 

 

Goodwill impairment

 

 

(418,000)

 

 

—

 

 

Operating income

 

$

2,175,249

 

$

2,340,731

 

(7.1)%

 

 

 

 

 

 

 

Percentages of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Healthcare Solutions

 

 

 

 

 

 

Gross profit

 

 

2.42%

 

 

2.48%

 

 

Operating expenses

 

 

1.31%

 

 

1.37%

 

 

Operating income

 

 

1.11%

 

 

1.11%

 

 

 

 

 

 

 

 

 

International Healthcare Solutions

 

 

 

 

 

 

Gross profit

 

 

11.60%

 

 

11.64%

 

 

Operating expenses

 

 

9.11%

 

 

9.11%

 

 

Operating income

 

 

2.49%

 

 

2.53%

 

 

 

 

 

 

 

 

 

Cencora, Inc. (GAAP)

 

 

 

 

 

 

Gross profit

 

 

3.37%

 

 

3.42%

 

 

Operating expenses

 

 

2.63%

 

 

2.52%

 

 

Operating income

 

 

0.74%

 

 

0.89%

 

 

 

 

 

 

 

 

 

Cencora, Inc. (Non-GAAP)

 

 

 

 

 

 

Adjusted gross profit

 

 

3.31%

 

 

3.44%

 

 

Adjusted operating expenses

 

 

2.07%

 

 

2.18%

 

 

Adjusted operating income

 

 

1.24%

 

 

1.25%

 

 

 

Note: For more information related to non-GAAP financial measures, refer to the section titled "Supplemental Information Regarding Non-GAAP Financial Measures" of this release.

 

CENCORA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)

   

 

September 30,

 

2024

 

2023

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

3,132,648

 

$

2,592,051

Accounts receivable, net

 

23,871,815

 

 

20,911,081

Inventories

 

18,998,833

 

 

17,454,768

Right to recover assets

 

1,175,871

 

 

1,314,857

Prepaid expenses and other

 

538,646

 

 

526,069

Total current assets

 

47,717,813

 

 

42,798,826

 

 

 

 

Property and equipment, net

 

2,181,410

 

 

2,135,171

Goodwill and other intangible assets

 

13,319,073

 

 

14,005,900

Deferred income taxes

 

246,348

 

 

200,667

Other assets

 

3,637,023

 

 

3,418,182

 

 

 

 

Total assets

$

67,101,667

 

$

62,558,746

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

50,942,162

 

$

45,836,037

Accrued expenses and other

 

2,758,560

 

 

2,353,817

Short-term debt

 

576,331

 

 

641,344

Total current liabilities

 

54,277,053

 

 

48,831,198

 

 

 

 

Long-term debt

 

3,811,745

 

 

4,146,113

 

 

 

 

Accrued income taxes

 

291,796

 

 

310,676

Deferred income taxes

 

1,643,746

 

 

1,657,944

Accrued litigation liability

 

4,296,902

 

 

5,061,795

Other liabilities

 

1,993,683

 

 

1,884,733

 

 

 

 

Total equity

 

786,742

 

 

666,287

 

 

 

 

Total liabilities and stockholders' equity

$

67,101,667

 

$

62,558,746

 

CENCORA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)

   

 

Fiscal Year Ended September 30,

 

2024

 

2023

Operating Activities:

 

 

 

Net income

$

1,519,273

 

$

1,732,576

Adjustments to reconcile net income to net cash provided by operating activities

 

1,666,724

 

 

1,304,216

Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures:

 

 

 

Accounts receivable

 

(2,784,339)

 

 

(2,711,786)

Inventories

 

(1,479,599)

 

 

(2,183,368)

Accounts payable

 

4,968,093

 

 

6,103,451

Other, net

 

(405,467)

 

 

(333,755)

Net cash provided by operating activities

 

3,484,685

 

 

3,911,334

 

 

 

 

Investing Activities:

 

 

 

Capital expenditures

 

(487,173)

 

 

(458,359)

Cost of acquired companies, net of cash acquired 1

 

(69,771)

 

 

(1,409,835)

Cost of equity investments 2

 

(30,430)

 

 

(743,275)

Non-customer note receivable

 

(50,000)

 

 

—

Other, net

 

19,278

 

 

9,004

Net cash used in investing activities

 

(618,096)

 

 

(2,602,465)

 

 

 

 

Financing Activities:

 

 

 

Net debt repayments

 

(385,452)

 

 

(623,258)

Purchases of common stock

 

(1,491,367)

 

 

(1,180,728)

Exercises of stock options

 

37,840

 

 

61,152

Cash dividends on common stock

 

(416,168)

 

 

(398,752)

Employee tax withholdings related to restricted share vesting

 

(63,500)

 

 

(71,279)

Other, net

 

(12,347)

 

 

(9,413)

Net cash used in financing activities

 

(2,330,994)

 

 

(2,222,278)

 

 

 

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

9,396

 

 

72,759

 

 

 

 

Increase (decrease) in cash, cash equivalents, and restricted cash

 

544,991

 

 

(840,650)

 

 

 

 

Cash, cash equivalents, and restricted cash at beginning of fiscal year 3

 

2,752,889

 

 

3,593,539

 

 

 

 

Cash, cash equivalents, and restricted cash at end of fiscal year 3

$

3,297,880

 

$

2,752,889

________________________________________

1

Includes $1,406.5 million for the acquisition of PharmaLex in the fiscal year ended September 30, 2023.

  2

Includes a $718.4 million investment in OneOncology in the fiscal year ended September 30, 2023.

  3

The following represents a reconciliation of cash and cash equivalents in the Condensed Consolidated Balance Sheets to cash, cash equivalents, and restricted cash in the Condensed Consolidated Statements of Cash Flows:

 

 

September 30,

(amounts in thousands)

 

2024

 

2023

 

2022

Cash and cash equivalents

 

$

3,132,648

 

$

2,592,051

 

$

3,388,189

Restricted cash (included in Prepaid Expenses and Other)

 

 

98,596

 

 

97,722

 

 

144,980

Restricted cash (included in Other Assets)

 

 

66,636

 

 

63,116

 

 

60,370

Cash, cash equivalents, and restricted cash

 

$

3,297,880

 

$

2,752,889

 

$

3,593,539

 

SUPPLEMENTAL INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES

To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses the non-GAAP financial measures described below. The non-GAAP financial measures should be viewed in addition to, and not in lieu of, financial measures calculated in accordance with GAAP. These supplemental measures may vary from, and may not be comparable to, similarly titled measures by other companies.

The non-GAAP financial measures are presented because management uses non-GAAP financial measures to evaluate the Company’s operating performance, to perform financial planning, and to determine incentive compensation. Therefore, the Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. The presented non-GAAP financial measures exclude items that management does not believe reflect the Company’s core operating performance because such items are outside the control of the Company or are inherently unusual, non-operating, unpredictable, non-recurring, or non-cash. We have included the following non-GAAP earnings-related financial measures in this release:

• Adjusted gross profit and adjusted gross profit margin: Adjusted gross profit is a non-GAAP financial measure that excludes gains from antitrust litigation settlements, Turkey highly inflationary impact and LIFO expense (credit). Adjusted gross profit margin is the ratio of adjusted gross profit to total revenue. Management believes that these non-GAAP financial measures are useful to investors as a supplemental measure of the Company’s ongoing operating performance. Gains from antitrust litigation settlements, Turkey highly inflationary impact, and LIFO expense (credit) are excluded because the Company cannot control the amounts recognized or timing of these items. Gains from antitrust litigation settlements relate to the settlement of lawsuits that have been filed against brand pharmaceutical manufacturers alleging that the manufacturer, by itself or in concert with others, took improper actions to delay or prevent generic drugs from entering the market. LIFO expense (credit) is affected by changes in inventory quantities, product mix, and manufacturer pricing practices, which may be impacted by market and other external influences.
• Adjusted operating expenses and adjusted operating expense margin: Adjusted operating expenses is a non-GAAP financial measure that excludes acquisition-related intangibles amortization; litigation and opioid-related expenses (credit); acquisition-related deal and integration expenses; restructuring and other expenses; and goodwill impairment. Adjusted operating expense margin is the ratio of adjusted operating expenses to total revenue. Acquisition-related intangibles amortization is excluded because it is a non-cash item and does not reflect the operating performance of the acquired companies. We exclude acquisition-related deal and integration expenses and restructuring and other expenses that relate to unpredictable and/or non-recurring business activities. We exclude the amount of litigation and opioid-related expenses (credit), and the impairment of goodwill, that are unusual, non-operating, unpredictable, non-recurring or non-cash in nature because we believe these exclusions facilitate the analysis of our ongoing operational performance.
• Adjusted operating income and adjusted operating income margin: Adjusted operating income is a non-GAAP financial measure that excludes the same items that are described above and excluded from adjusted gross profit and adjusted operating expenses. Adjusted operating income margin is the ratio of adjusted operating income to total revenue. Management believes that these non-GAAP financial measures are useful to investors as a supplemental way to evaluate the Company’s performance because the adjustments are unusual, non-operating, unpredictable, non-recurring or non-cash in nature.
• Adjusted income before income taxes: Adjusted income before income taxes is a non-GAAP financial measure that excludes the same items that are described above and excluded from adjusted operating income. In addition, the gain (loss) on the currency remeasurement of the deferred tax asset relating to 2020 Swiss tax reform, the gain on the divestiture of non-core businesses, and the gain (loss) on the remeasurement of an equity investment are excluded from adjusted income before income taxes because these amounts are unusual, non-operating, and/or non-recurring. Management believes that this non-GAAP financial measure is useful to investors because it facilitates the calculation of the Company’s adjusted effective tax rate.
• Adjusted effective tax rate: Adjusted effective tax rate is a non-GAAP financial measure that is determined by dividing adjusted income tax expense by adjusted income before income taxes. Management believes that this non-GAAP financial measure is useful to investors because it presents an effective tax rate that does not reflect unusual, non-operating, unpredictable, non-recurring, or non-cash amounts or items that are outside the control of the Company.
• Adjusted income tax expense: Adjusted income tax expense is a non-GAAP financial measure that excludes the income tax expense associated with the same items that are described above and excluded from adjusted income before income taxes. Certain discrete tax items primarily attributable to foreign valuation allowance adjustments are also excluded from adjusted income tax expense. Further, certain expenses relating to 2020 Swiss tax reform are excluded from adjusted income tax expense. Management believes that this non-GAAP financial measure is useful to investors as a supplemental way to evaluate the Company’s performance because the adjustments are unusual, non-operating, unpredictable, non-recurring or non-cash in nature.
• Adjusted net income/loss attributable to noncontrolling interest: Adjusted net income/loss attributable to noncontrolling interest excludes the non-controlling interest portion of the same items described above. Management believes that this non-GAAP financial measure is useful to investors because it facilitates the calculation of adjusted net income attributable to the Company.
• Adjusted net income attributable to the Company: Adjusted net income attributable to the Company is a non-GAAP financial measure that excludes the same items that are described above. Management believes that this non-GAAP financial measure is useful to investors as a supplemental way to evaluate the Company's performance because the adjustments are unusual, non-operating, unpredictable, non-recurring or non-cash in nature.
• Adjusted diluted earnings per share: Adjusted diluted earnings per share excludes the per share impact of adjustments including gains from antitrust litigation settlements; Turkey highly inflationary impact; LIFO expense (credit); acquisition-related intangibles amortization; litigation and opioid expenses (credit); acquisition-related deal and integration expenses; restructuring and other expenses; impairment of goodwill; the gain on the divestiture of non-core businesses; the gain (loss) on the currency remeasurement related to 2020 Swiss tax reform; and the gain (loss) on the remeasurement of an equity investment, in each case net of the tax effect calculated using the applicable effective tax rate for those items. In addition, the per share impact of certain discrete tax items primarily attributable to an adjustment of a foreign valuation allowance, and the per share impact of certain expenses related to 2020 Swiss tax reform are also excluded from adjusted diluted earnings per share. Management believes that this non-GAAP financial measure is useful to investors because it eliminates the per share impact of the items that are outside the control of the Company or that we consider to not be indicative of our ongoing operating performance due to their inherent unusual, non-operating, unpredictable, non-recurring, or non-cash nature.
• Adjusted Free Cash Flow: Adjusted free cash flow is a non-GAAP financial measure defined as net cash provided by operating activities, excluding significant unpredictable or non-recurring cash payments or receipts relating to legal settlements, minus capital expenditures. Adjusted free cash flow is used internally by management for measuring operating cash flow generation and setting performance targets and has historically been used as one of the means of providing guidance on possible future cash flows. For the fiscal year ended September 30, 2024, adjusted free cash flow of $3,064.3 million consisted of net cash provided by operating activities of $3,484.7 million plus $237.7 million for the prepayment of a future obligation as permitted under our opioid settlement agreements, minus capital expenditures of $487.2 million and the gains from antitrust litigation settlements of $170.9 million. The Company does not provide forward looking guidance on a GAAP basis for free cash flow because the timing and amount of favorable and unfavorable settlements excluded from this metric, the probable significance of which cannot be determined, are unavailable and cannot be reasonably estimated.

In our slide presentation for investors, the Company also presents revenue and operating income on a “constant currency” basis, which are non-GAAP financial measures. These amounts are calculated by translating current period GAAP results at the foreign currency exchange rates used in the comparable period in the prior year. The Company presents such constant currency financial information because it has significant operations outside of the United States reporting in currencies other than the U.S. dollar and management believes that this presentation provides a framework to assess how its business performed excluding the impact of foreign currency exchange rate fluctuations. For the fourth quarter of fiscal 2024, (i) revenue of $79.1 billion was negatively impacted by foreign currency translation of $164.5 million, resulting in revenue on a constant currency basis of $79.2 billion, and (ii) operating income of $851.1 million was negatively impacted by foreign currency translation of $1.1 million, resulting in operating income on a constant currency basis of $852.2 million. For the fourth quarter of fiscal 2024 in the International Healthcare Solutions segment, (i) revenue of $7.4 billion was negatively impacted by foreign currency translation of $164.5 million, resulting in revenue on a constant currency basis of $7.5 billion, and (ii) operating income of $153.7 million was negatively impacted by foreign currency translation of $1.1 million, resulting in operating income on a constant currency basis of $154.8 million. For fiscal 2024, (i) revenue of $294.0 billion was negatively impacted by foreign currency translation of $995.9 million, resulting in revenue on a constant currency basis of $295.0 billion, and (ii) operating income of $3.6 billion was negatively impacted by foreign currency translation of $38.8 million, resulting in operating income on a constant currency basis of $3.7 billion. For fiscal 2024 in the International Healthcare Solutions segment, (i) revenue of $28.6 billion was negatively impacted by foreign currency translation of $995.9 million, resulting in revenue on a constant currency basis of $29.6 billion, and (ii) operating income of $713.4 million was negatively impacted by foreign currency translation of $38.8 million, resulting in operating income on a constant currency basis of $752.2 million.

In addition, the Company has provided non-GAAP fiscal year 2025 guidance for diluted earnings per share, operating income, effective income tax rate and free cash flow that excludes the same or similar items as those that are excluded from the historical non-GAAP financial measures, as well as significant items that are outside the control of the Company or inherently unusual, non-operating, unpredictable, non-recurring or non-cash in nature. The Company does not provide forward looking guidance on a GAAP basis for such metrics because certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated. For example, LIFO expense/credit is largely dependent upon the future inflation or deflation of brand and generic pharmaceuticals, which is out of the Company’s control, and acquisition-related intangibles amortization depends on the timing and amount of future acquisitions, which cannot be reasonably estimated. Similarly, the timing and amount of favorable and unfavorable settlements, the probable significance of which cannot be determined, are unavailable and cannot be reasonably estimated.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241106645310/en/

Bennett S. Murphy Senior Vice President, Head of Investor Relations and Treasury 610-727-3693 bennett.murphy@cencora.com