AmerisourceBergen Corp. (ABC) filed Annual Report for the period ended 2009-09-30.
AmerisourceBergen Corporation is one of the world's largest pharmaceutical services companies serving the United States, Canada and selected global markets. Servicing both pharmaceutical manufacturers and healthcare providers in the pharmaceutical supply channel, the Company provides drug distribution and related services designed to reduce costs and improve patient outcomes. AmerisourceBergen's service solutions range from pharmacy automation and pharmaceutical packaging to pharmacy services for skilled nursing and assisted living facilities, reimbursement and pharmaceutical consulting services, and physician education. Amerisourcebergen Corp. has a market cap of $7.44 billion; its shares were traded at around $25.02 with a P/E ratio of 14.7 and P/S ratio of 0.1. The dividend yield of Amerisourcebergen Corp. stocks is 1.3%. Amerisourcebergen Corp. had an annual average earning growth of 13% over the past 10 years. GuruFocus rated Amerisourcebergen Corp. the business predictability rank of 3.5-star.
Highlight of Business Operations:
Pharmaceutical sales in the United States, as recently estimated by IMS Healthcare, Inc. (“IMS”), an independent third party provider of information to the pharmaceutical and healthcare industry, are expected to grow between 3% and 5% in calendar 2010. IMS expects that certain sectors of the market, such as biotechnology and other specialty and generic pharmaceuticals, will grow faster than the overall market. Additionally, IMS expects the U.S. pharmaceutical industry to grow annually in the low to mid-single digit percentages through 2013.
Customers. We have a diverse customer base that includes institutional and retail healthcare providers as well as pharmaceutical manufacturers. Institutional healthcare providers include acute care hospitals, health systems, mail order pharmacies, long-term care and other alternate care pharmacies and providers of pharmacy services to such facilities, and physician offices. Retail healthcare providers include national and regional retail drugstore chains, independent community pharmacies and pharmacy departments of supermarkets and mass merchandisers. We are typically the primary source of supply for our healthcare provider customers. Our manufacturing customers include branded, generic and biotech manufacturers of prescribed pharmaceuticals, as well as over-the-counter product and health and beauty aid manufacturers. In addition, we offer a broad range of value-added solutions designed to enhance the operating efficiencies and competitive positions of our customers, thereby allowing them to improve the delivery of healthcare to patients and consumers. In fiscal 2009, total revenue was comprised of 68% institutional customers and 32% retail customers.
In fiscal 2009, Medco Health Solutions, Inc., our largest customer, accounted for 17% of our total revenue. No other individual customer accounted for more than 5% of our fiscal 2009 total revenue. Our top ten customers represented approximately 41% of fiscal 2009 total revenue. In addition, we have contracts with group purchasing organizations (“GPOs”), each of which functions as a purchasing agent on behalf of its members, who are healthcare providers. Approximately 10% of our total revenue in fiscal 2009 was derived from our three largest GPO relationships. The loss of any major customer or GPO relationship could adversely affect future revenue and results of operations.
Suppliers. We obtain pharmaceutical and other products from manufacturers, none of which accounted for 10% or more of our purchases in fiscal 2009. The loss of a supplier could adversely affect our business if alternate sources of supply are unavailable since we are committed to be the primary source of pharmaceutical products for a majority of our customers. We believe that our relationships with our suppliers are good. The ten largest suppliers in fiscal 2009 accounted for approximately 48% of our purchases.
ABC is in the portfolios of David Williams of Columbia Value and Restructuring Fund, Andreas Halvorsen of Viking Global Investors LP, John Keeley of Keeley Fund Management, Richard Pzena of Pzena Investment Management LLC, George Soros of Soros Fund Management LLC.
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