-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MXFQ1w3HS4mzAs7Qq1OsCCHZaX90Jhbzoueg7nW8OUrKUdaQ+Qy53NhuLValmIiQ 5hXoIRGRuXI4CF+MjaQcfw== 0000950109-96-002438.txt : 19960430 0000950109-96-002438.hdr.sgml : 19960430 ACCESSION NUMBER: 0000950109-96-002438 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960429 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERISOURCE DISTRIBUTION CORP CENTRAL INDEX KEY: 0000855042 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES [5122] IRS NUMBER: 232546940 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20485 FILM NUMBER: 96552460 BUSINESS ADDRESS: STREET 1: PO BOX 959 CITY: VALLEY FORGE STATE: PA ZIP: 19482 BUSINESS PHONE: 2152964480 MAIL ADDRESS: STREET 1: P.O. BOX 959 CITY: VALLEY FORGE STATE: PA ZIP: 19482 FORMER COMPANY: FORMER CONFORMED NAME: ALCO HEALTH DISTRIBUTION CORP /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AHSC HOLDINGS CORP DATE OF NAME CHANGE: 19920325 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL QUARTER ENDED MARCH 31, 1996
COMMISSION REGISTRANT, STATE OF INCORPORATION IRS EMPLOYER FILE NUMBER ADDRESS AND TELEPHONE NUMBER IDENTIFICATION NO. - ----------- ---------------------------------- ------------------ 33-27835-01 AmeriSource Health Corporation 23-2546940 (a Delaware Corporation) (formerly AmeriSource Distribution Corporation) P.O. Box 959, Valley Forge, Pennsylvania 19482 (610) 296-4480
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [_] The number of shares of common stock of AmeriSource Health Corporation outstanding as of March 31, 1996 was: Class A--11,995,206, Class B--9,896,041; Class C--279,439 . INDEX AMERISOURCE HEALTH CORPORATION PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated balance sheets--March 31, 1996 and September 30, 1995 Consolidated statements of operations--Three months ended March 31, 1996 and March 31, 1995 Consolidated statements of operations--Six months ended March 31, 1996 and March 31, 1995 Consolidated statements of cash flows--Six months ended March 31, 1996 and March 31, 1995 Management's Discussion and Analysis of Financial Condition and Item 2. Results of Operations PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders Item 6. Exhibits and Reports on Form 8-K
2 PART 1. FINANCIAL INFORMATION ITEM 1. AMERISOURCE HEALTH CORPORATION FINANCIAL STATEMENTS (UNAUDITED) AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS)
(UNAUDITED) MARCH 31, SEPTEMBER 30, 1996 1995 ----------- ------------- ASSETS Current Assets: Cash and cash equivalents........................... $ 63,833 $ 32,171 Restricted cash..................................... 6,102 14,638 Accounts receivable less allowance for doubtful accounts: 3/96--$13,548, 9/95--$12,941............. 340,272 318,652 Merchandise inventories............................. 590,675 404,522 Prepaid expenses and other.......................... 3,714 3,221 ---------- -------- Total current assets.............................. 1,004,596 773,204 Property and Equipment, at cost....................... 85,985 76,826 Less accumulated depreciation....................... 35,432 31,582 ---------- -------- 50,553 45,244 Other assets.......................................... 27,983 20,225 ---------- -------- $1,083,132 $838,673 ========== ========
See notes to consolidated financial statements. 3 AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS)
(UNAUDITED) MARCH 31, SEPTEMBER 30, 1996 1995 ----------- ------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable................................... $ 609,607 $ 462,804 Accrued expenses and other......................... 25,368 27,720 Accrued income taxes............................... 17,357 13,596 Deferred income taxes.............................. 32,809 25,892 ---------- --------- Total current liabilities........................ 685,141 530,012 Long-Term Debt: Revolving credit facility.......................... 215,000 150,000 Receivables securitization financing............... 209,860 209,842 Senior debentures.................................. 74,293 74,293 Other debt......................................... 1,697 1,629 ---------- --------- 500,850 435,764 Other Liabilities.................................... 7,518 8,621 Stockholders' Equity Common Stock, $.01 par value: Class A (Voting and convertible): 50,000,000 shares authorized; issued 3/96--12,346,288 shares; 9/95--12,062,560 shares.......................... 124 121 Class B (Non-voting and convertible): 15,000,000 shares authorized; issued 3/96--12,846,041 shares; 9/95--12,969,050 shares.......................... 128 130 Class C (Non-voting and convertible): 2,000,000 shares authorized; issued 3/96--279,439 shares; 9/95--440,158 shares............................. 3 4 Capital in excess of par value..................... 171,441 165,044 Retained earnings (deficit)........................ (275,853) (294,803) Cost of common stock in treasury................... (6,220) (6,220) ---------- --------- (110,377) (135,724) ---------- --------- $1,083,132 $838,673 ========== =========
See notes to consolidated financial statements. 4 AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS)
(UNAUDITED) THREE MONTHS ENDED MARCH 31, --------------------- 1996 1995 ---------- ---------- Revenues............................................... $1,362,056 $1,178,035 Cost of goods sold..................................... 1,283,898 1,112,397 ---------- ---------- Gross Profit........................................... 78,158 65,638 Selling and administrative expenses.................... 48,907 38,536 Depreciation........................................... 1,968 1,736 ---------- ---------- Operating income..................................... 27,283 25,366 Interest expense....................................... 9,870 14,666 ---------- ---------- Income before taxes and extraordinary item............. 17,413 10,700 Taxes on income........................................ 7,313 4,027 ---------- ---------- Income before extraordinary item....................... 10,100 6,673 Extraordinary charge-early retirement of debt, net of income tax benefit.................................... -- (126) ---------- ---------- Net income........................................... $ 10,100 $ 6,547 ========== ========== Earnings per share (fully diluted): Income before extraordinary item..................... $ .45 $ .45 Extraordinary item................................... -- -- ---------- ---------- Net income......................................... $ .45 $ .45 ========== ==========
See notes to consolidated financial statements. 5 AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS)
(UNAUDITED) SIX MONTHS ENDED MARCH 31, --------------------- 1996 1995 ---------- ---------- Revenues............................................... $2,644,569 $2,307,131 Cost of goods sold..................................... 2,496,686 2,178,256 ---------- ---------- Gross Profit........................................... 147,883 128,875 Selling and administrative expenses.................... 92,245 78,134 Depreciation........................................... 3,964 3,436 ---------- ---------- Operating income..................................... 51,674 47,305 Interest expense....................................... 19,002 31,989 ---------- ---------- Income before taxes and extraordinary item............. 32,672 15,316 Taxes on income........................................ 13,722 7,757 ---------- ---------- Income before extraordinary item....................... 18,950 7,559 Extraordinary charge-early retirement of debt, net of income tax benefit.................................... -- (11,875) ---------- ---------- Net income (loss).................................... $ 18,950 $ (4,316) ========== ========== Earnings (loss) per share (fully diluted): Income before extraordinary item..................... $ .84 $ .51 Extraordinary item................................... -- (.80) ---------- ---------- Net income (loss).................................. $ .84 $ (.29) ========== ==========
See notes to consolidated financial statements. 6 AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS)
(UNAUDITED) SIX MONTHS ENDED MARCH 31 -------------------- 1996 1995 -------- ---------- OPERATING ACTIVITIES Net income (loss)....................................... $ 18,950 $ (4,316) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation........................................... 3,964 3,436 Amortization........................................... 1,340 1,298 Provision for losses on accounts receivable............ 192 3,543 (Gain) loss on disposal of property and equipment...... (14) (35) Deferred income taxes.................................. 5,724 (999) Loss on early retirement of debt....................... 15,552 Changes in operating assets and liabilities: Restricted cash....................................... 8,536 (38,098) Accounts receivable................................... (204) (17,736) Merchandise inventories............................... (153,828) (72,445) Prepaid expenses...................................... (104) (503) Accounts payable, accrued expenses and income taxes... 119,028 (23,362) Debentures issued in lieu of payment of interest...... 8,101 Miscellaneous.......................................... 597 (911) -------- ---------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES.. 4,181 (126,475) INVESTING ACTIVITIES Capital expenditures.................................... (9,741) (5,998) Proceeds from sales of property and equipment........... 465 1,694 Cost of company acquired................................ (28,329) -------- ---------- NET CASH (USED IN) INVESTING ACTIVITIES.............. (37,605) (4,304) FINANCING ACTIVITIES Long-term debt borrowings............................... 806,060 1,053,905 Long-term debt repayments............................... (740,974) (914,578) Deferred financing costs................................ (7,704) Exercise of stock option................................ 114 Purchase of treasury stock.............................. (1,270) -------- ---------- NET CASH PROVIDED BY FINANCING ACTIVITIES............ 65,086 130,467 -------- ---------- Increase (decrease) in cash and cash equivalents......... 31,662 (312) Cash and cash equivalents at beginning of period......... 32,171 25,311 -------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD............... $ 63,833 $ 24,999 ======== ==========
See notes to consolidated financial statements. 7 AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1--BASIS OF PRESENTATION The accompanying financial statements present the consolidated financial position, results of operations and cash flows of AmeriSource Health Corporation, formerly AmeriSource Distribution Corporation, and its wholly- owned subsidiaries (the "Company") as of the dates and for the periods indicated. All material intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position as of March 31, 1996, the results of operations for the three and six months ended March 31, 1996 and 1995 and the cash flows for the six months ended March 31, 1996 and 1995 have been included. Certain information and footnote disclosures normally included in financial statements presented in accordance with generally accepted accounting principles, but which are not required for interim reporting purposes, have been omitted. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1995. The Company's income (loss) per share and share data in the financial statements have been retroactively restated to reflect the effect of the 2.95- for-1 stock split declared in connection with the public offering by the Company of its Common Stock in April, 1995. NOTE 2--LEGAL MATTERS AND CONTINGENCIES In the ordinary course of its business, the Company becomes involved in lawsuits, administrative proceedings and governmental investigations, including antitrust, environmental, product liability and regulatory agency and other matters. In some of these proceedings, plaintiffs may seek to recover large and sometimes unspecified amounts and the matters may remain unresolved for several years. On the basis of information furnished by counsel and others, the Company does not believe that these matters, individually or in the aggregate, will have a material adverse effect on its business or financial condition. The Company is subject to contingencies pursuant to environmental laws and regulations at one of its former distribution centers that may require the Company to take remediation efforts. In fiscal 1994, the Company accrued $4.1 million to cover future consulting, legal, and remediation and ongoing monitoring costs. The accrued liability, which is reflected in other long-term liabilities on the accompanying consolidated balance sheet ($3.9 million at March 31, 1996), is based on an engineering analysis prepared by outside consultants and represents an estimate of the extent of contamination and choice of remedy, existing technology and presently enacted laws and regulations. However, changes in remediation standards, improvements in cleanup technology and discovery of additional information concerning the site could affect the estimated liability in the future. The Company is investigating the possibility of asserting claims against responsible parties for recovery of these costs. Whether or not any recovery may be forthcoming is unknown at this time, although the Company intends to vigorously enforce its rights and remedies. The Company has received notices from the Internal Revenue Service asserting deficiencies in federal corporate income taxes for the Company's taxable years 1987 through 1991. The proposed adjustments indicate a net increase to taxable income for these years of approximately $24 million and relate principally to the deductibility of costs incurred with respect to the leveraged buyout transaction which occurred in 1988. The Company has analyzed these matters with tax counsel and believes it has meritorious defenses to the deficiencies asserted by the Internal Revenue Service. The Company will contest the asserted deficiencies through the administrative appeals process and, if necessary, litigation. 8 AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) In November 1993, the Company, along with six other wholesale distributors and twenty-four pharmaceutical manufacturers, were named as defendants in a series of purported class action antitrust lawsuits alleging violations of various antitrust laws associated with the chargeback pricing system. In addition, the Company is a party to a parallel suit filed in state court in Minnesota. Plaintiffs seek injunctive relief, treble damages, attorneys' fees, and costs. In October 1994, the Company entered into a Judgement Sharing Agreement with other wholesaler and pharmaceutical manufacturer defendants. Under the Judgement Sharing Agreement (a) the manufacturer defendants agreed to reimburse the wholesaler defendants for litigation costs incurred, up to an aggregate of $9 million; and (b) if a judgement is entered into against both manufacturers and wholesalers, the total exposure for joint and several liability of the Company is limited to the lesser of 1% of such judgement or $1 million. In addition, the Company has released any claims that it might have had against the manufacturers for the claims presented by the plaintiffs in these lawsuits. The Judgement Sharing Agreement covers the federal court litigation as well as the cases which have been filed in various state courts. On April 4, 1996, the federal court granted the wholesalers' motion for summary judgment. NOTE 3--EARNINGS PER SHARE Earnings (loss) per share is computed on the basis of the weighted average number of shares outstanding during the periods presented (22,170,686 and 14,780,238 for the three months ended March 31, 1996 and March 31, 1995, respectively; and 22,170,686 and 14,764,953 for the six months ended March 31, 1996 and March 31, 1995, respectively) plus the dilutive effect of stock options (339,707 and 333,035 for the three and six months ended March 31, 1996, respectively on a fully diluted basis). Share and per share amounts prior to April 1995 have been adjusted for the 2.95-for-1 stock split effected in conjunction with the Company's public offering. NOTE 4--ACQUISITION In February 1996, the Company acquired all of the stock of Gulf Distribution Inc. in a cash transaction. Gulf Distribution Inc. is a Miami, Florida based wholesale pharmaceutical distributor with annualized revenues of approximately $180 million. The purchase price was $28.3 million and the transaction was accounted for by the purchase method. The excess of the purchase price over net assets acquired has been allocated to goodwill. Changes in purchase accounting estimates may result in a reallocation of the purchase price within one year of the acquisition. NOTE 5--SUBSEQUENT EVENTS In April 1996, the Company purchased and retired $26.7 million of its 11 1/4% Senior Debentures for 111% of the principal amount plus accrued interest through the date of purchase (approximately $30.5 million) which resulted in an extraordinary charge of $3.7 million (less a $1.6 million tax benefit) relating to the market premium and related writeoff of unamortized financing fees. In April 1996, the Company filed a registration statement with respect to a proposed public offering by the Company of up to 5,520,000 shares of Class A common stock, including an over-allotment option of up to 720,000 shares. Of the 5,520,000 shares to be offered, 1,500,000 shares are to be sold by the Company and 4,020,000 shares are to be sold by certain stockholders of the Company (the "Selling Stockholders"). The Company will not receive any of the proceeds from the shares to be sold by the Selling Stockholders. The proceeds from the 1,500,000 shares to be sold by the Company will be used to repay long-term debt and for general corporate purposes. 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Revenues for the three months ended March 31, 1996 increased 16% to $1.4 billion from $1.2 billion in fiscal 1995. For the six months ended March 31, 1996, revenues were $2.6 billion, an increase of $337.4 million or 15% compared to the prior year. The year-to-year revenue gains reflect increases across all customer groups and the impact of the Company's expansion into new geographic markets, especially in the western and northeastern United States, and price increases. Revenues of the Company's western region increased by 43% in the first six months of fiscal 1996. The acquisitions of Newbro Drug Company in July 1995 and Gulf Distribution Inc. in February 1996 accounted for 2% of the 15% increase in revenues for the first six months of fiscal 1996. During the six months ended March 31, 1996, sales to hospitals increased 5%, sales to independent drug store customers increased 24%, and sales to the chain drug store customer group increased 21%, as compared with the prior fiscal year. During the six months ended March 31, 1996 sales to hospitals accounted for 43% of total revenues, while sales to independent drug stores accounted for 37% and sales to chain drug stores 20% of the total. Gross profit of $78.2 million in the second quarter of fiscal 1996 increased by 19% over 1995 due to the increase in revenues and gross profit margin expansion. As a percentage of revenues, the gross profit margin in the second fiscal quarter of fiscal 1996 was 5.74% as compared to 5.57% in the prior year. For the six months ended March 31, 1996, the gross profit margin percentage of 5.59% was unchanged from the prior year. The increase in gross profit margin percentage from the prior year second quarter was due to increased sales of higher margin generic drugs, the continued introduction of new marketing programs with manufacturers, the growth of higher margin specialty businesses such as pharmaceutical repackaging, and an increase in inventory investment buying activity, offset in part by a decline in selling margin percentage due to continuing price competition throughout the industry. Operating expenses increased by $10.6 million or 26%, in the second quarter of fiscal 1996 compared with the prior year, and as a percentage of revenues, were 3.74% in 1996 and 3.42% in 1995. For the first six months of fiscal 1996, operating expenses increased 18% compared to the prior year and represented 3.64% of revenues versus 3.54% of revenues in the prior year. The increase as a percentage of revenue in fiscal 1996 is primarily due to the cost of opening new distribution facilities in Orlando, Florida, and Phoenix, Arizona, integration costs related to Newbro Drug Company and Gulf Distribution, Inc., above average growth of the higher cost to service independent drug store segment, and the cost of developing new value added marketing programs. These costs have been offset in part by continued economies of scale at the Company's established locations. Operating income of $27.3 million in the second quarter of fiscal 1996 increased by 8% over the prior year. For the six months ended March 31, 1996 operating income increased by 9% compared to the prior year. As a percentage of revenues, the Company's operating margin declined to 1.95% in fiscal 1996 from 2.05% in fiscal 1995 due to the increase in expenses discussed above. The Company is evaluating its distribution network to identify opportunities for increased efficiencies and cost reduction necessary to maintain and grow its operating margin. Interest expense of $9.9 million in the second quarter of fiscal 1996 represents a decrease of $4.8 million or 33% compared to the prior year quarter. For the six month period ended March 31, 1996 interest expense declined by $13.0 million or 41% versus the prior year six month period. The decrease was due to the redemption, in January 1995 of the $166.1 million of 14 1/2% senior subordinated notes, the redemption, in May 1995, of $74.3 million of 11 1/4% senior debentures, and lower average borrowing rates due to the implementation of the receivables securitization financing in December 1994 and reductions in the borrowing rates of the Company's revolving credit facility which was amended in December 1994. Average borrowings during the quarter ended March 31, 1996 were $522 million as compared to average borrowings of $673 million in the prior year second quarter. For the six months ended March 31, 1996, average borrowings were $486 million versus average borrowings of $623 million in the prior year. 10 The income tax provisions for the three and six months ended March 31, 1996 were computed based on an estimate of the full year effective tax rate. The extraordinary charge in fiscal 1995 of $15.6 million, net of a tax benefit of $3.7 million, relates to the amendment of the revolving credit facility and the redemption of the 14 1/2% senior subordinated notes and the consequent write-off of unamortized financing fees and redemption premiums paid in the prior year. LIQUIDITY AND CAPITAL RESOURCES During the six-month period ended March 31, 1996, the Company's operating activities generated $4.2 million in cash despite the increase of $153.8 million in merchandise inventories which was offset in part by the $119.0 million increase in accounts payable and reflects the Company's growth as well as increased purchases in anticipation of manufacturer price increases and other deal buying opportunities. A portion of the increase in inventories during the six month period was also due to the opening of the Phoenix, Arizona and Orlando, Florida distribution facilities. Operating cash uses during the six month period ended March 31, 1996 included $18.5 million in interest payments and $4.3 million in income tax payments. Capital expenditures for the six months ended March 31, 1996 were $9.7 million and are primarily equipment purchases related to the expansion of the Company's pharmaceutical repackaging operation, the opening of the Orlando, Florida and Phoenix, Arizona distribution centers, and additional investments in information technology. Investments in information technology and warehouse improvements are expected to continue throughout the year, and total capital expenditures are expected to be $15 million for the fiscal year. In February 1996, the Company purchased all of the stock of Gulf Distribution Inc. in a cash transaction. The transaction was funded by borrowings under the revolving credit facility. Gulf Distribution Inc. is a Miami, Florida-based wholesaler with annualized revenues of approximately $180 million. The purchase price was $28.3 million. Cash provided by financing activities during the first six months of fiscal 1996 represents borrowings under the Company's revolving credit facility and its receivable securitization financing primarily to fund its working capital requirements. As a result of the Company's initial public offering in April 1995 and its financial results, the borrowing rate alternatives under the revolving credit facility were reduced by 1.0% to LIBOR plus 1.25% and the prime rate plus zero beginning in October 1995. At March 31, 1996, borrowings under the Company's $380 million revolving credit facility were $215 million (at an average interest rate of 6.9%) and borrowings under the $285 million Receivables Program were $210 million (at an average interest rate of 5.8%). An increase in interest rates would adversely affect the Company's operating results and the cash flow available after debt service to fund operations and expansion and, if permitted to do so under its revolving credit facility, to pay dividends on its capital stock. The Company's operating results have generated sufficient cash flow which, together with borrowings under its debt agreements and credit terms from suppliers, have provided sufficient capital resources to finance working capital and cash operating requirements, fund capital expenditures, and interest currently payable on outstanding debt. The Company's primary ongoing cash requirements will be to fund payment of interest on indebtedness, finance working capital, and fund capital expenditures and routine growth and expansion through new business opportunities. Future cash flows from operations and borrowings are expected to be sufficient to fund the Company's ongoing cash requirements. In April 1996, the Company filed a registration statement with the SEC to sell approximately 5.5 million shares of its common stock, including an over- allotment option of 0.7 million shares, via a public offering. Of the 5.5 million shares to be offered, 1.5 million shares are to be sold by the Company and 4.0 million shares are to be sold by certain stockholders of the Company (the "Selling Stockholders"). The Company will not receive any of the proceeds from the shares to be sold by the Selling Stockholders. If successful, the proceeds from the 1.5 million shares to be sold by the Company will be used to repay long-term debt and for general corporate purposes. 11 In April 1996, the Company purchased and retired $26.7 million of its 11 1/4% Senior Debentures for 111% of the principal amount plus accrued interest through the date of purchase (approximately $30.5 million) which resulted in an extraordinary charge of $3.7 million (less a $1.6 million tax benefit) relating to the market premium on the redemption and related writeoff of unamortized financing fees. The Company is subject to certain contingencies pursuant to environmental laws and regulations at one of its former distribution centers that may require remediation efforts. In fiscal 1994, the Company accrued a liability of $4.1 million to cover future consulting, legal and remediation, and ongoing monitoring costs. The accrued liability, which is reflected in other long-term liabilities on the accompanying consolidated balance sheet, is based on an estimate of the extent of contamination and choice or remedy, existing technology, and presently enacted laws and regulation, however, changes in remediation standards, improvements in cleanup technology, and discovery of additional information concerning the site could affect the estimated liability in the future. The Company is investigating the possibility of asserting claims against responsible parties for recovery of these costs. Whether or not any recovery may be forthcoming is unknown at this time. 12 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On February 28, 1996, the Company held its annual meeting of stockholders, at which the following were reelected as directors of the Company to hold office until the next annual meeting of stockholders and until their successors have been elected and qualified: John F. McNamara, Bruce C. Bruckmann, Michael A. Delaney, Richard C. Gozon, Lawrence C. Karlson, George H. Strong, James A. Urry and Barton J. Winokur. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit Number 27 Financial Data Schedule (b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ended March 31, 1996. 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 THEREUNTO DULY AUTHORIZED. Amerisource Health Corporation /s/ Kurt J. Hilzinger _____________________________________ KURT J. HILZINGER VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER) Date: April 29, 1996 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERISOURCE HEALTH CORP. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS SEP-30-1996 OCT-01-1995 MAR-31-1996 69,935 0 340,272 13,548 590,675 1,004,596 85,985 35,432 1,083,132 685,141 500,850 0 0 255 (110,632) 1,083,132 2,644,569 2,644,569 2,496,686 2,496,686 0 192 19,002 32,672 13,722 18,950 0 0 0 18,950 .84 .84
-----END PRIVACY-ENHANCED MESSAGE-----