Health Mart fields more than 4,600 independents on 19% membership growth
SAN FRANCISCO – McKesson on Wednesday reported that revenues for the fourth quarter ended March 31, 2016 totaled $46.7 billion, up 4%. Fourth-quarter earnings per diluted share from continuing operations was $1.97 compared to $1.69 a year ago. Fourth-quarter Adjusted Earnings per diluted share was $2.44, down 17% compared to the prior year.
For the fiscal year, McKesson had revenues of $190.9 billion, up 7%. Full-year GAAP earnings per diluted share from continuing operations was $9.84 compared to $7.54 a year ago, up 31% year-over-year. Full-year Adjusted Earnings per diluted share was $12.08, up 9% compared to the prior year.
“Distribution Solutions concluded another solid year with good performance within the segment. During Fiscal 2016, we expanded our global pharmaceutical sourcing and procurement scale, grew our Health Mart franchise to more than 4,600 members, delivered strong growth in our Specialty Health and Canadian businesses and continued to successfully execute on our planned Celesio acquisition synergies,” stated John Hammergren, chairman and CEO McKesson.
"Health Mart extended its tremendous track record of growth during fiscal 2016, ending the year with more than 4,600 stores or approximately 19% growth over the prior year," Hammergren told analysts. "I know that customer consolidation which impacted us in fiscal 2016 has caused some to question the scale and competitiveness of McKesson's generic pharmaceutical sourcing. To me, there's no better proof point than some of the examples I just walked you through, where we continue to expand our customer relationships, win new customers, deliver strong growth in our OneStop proprietary generics program, and rapidly expand the number of independent pharmacies who see real value to their bottom line by joining Health Mart. I'm incredibly confident in the strength of our relationships with our manufacturing partners and in McKesson's ability to be a great partner to them through our global procurement scale and operational footprint."
Distribution Solutions revenues were $45.9 billion for the quarter, up 4% on a reported basis and 5% on a constant currency basis. For the full year, Distribution Solutions revenues were $188 billion, up 7% on a reported basis and 9% on a constant currency basis, compared to the prior year.
North America pharmaceutical distribution and services revenues were $38.7 billion for the quarter, up 5% on a reported basis and 6% on a constant currency basis, primarily reflecting market growth and growth from existing customers. For the full year, North America pharmaceutical distribution and services revenues were $158.5 billion, up 10% on a reported basis and 11% on a constant currency basis, compared to the prior year.
Technology Solutions products and services revenues were down 5% for the fourth quarter and down 6% for the full year. Fourth-quarter and full-year Technology Solutions revenues were impacted by an anticipated year-over-year decline in our hospital software business and the sale of our nurse triage business in the first quarter. This revenue decline was partially offset by growth in McKesson's other technology businesses.
Rite Aid Foundation donates $100,000 to Hurley Children’s Hospital in Flint, Mich.
CAMP HILL, Pa. – The Rite Aid Foundation's KidCents program announced Thursday a $100,000 donation to Hurley Children's Hospital to help address the long-term effects of the Flint water crisis. The donation will support Hurley Children's Hospital's Nutrition Prescription Program and will provide 10,000 fruit and vegetable prescriptions to all pediatric patients 6-months and older.
The prescription, which will be provided at each primary care visit, can be redeemed for up to $10 of fresh fruits and vegetables at the Flint Farmer's Market.
Rite Aid representatives presented the donation to Michigan State University and Hurley Children's Hospital Pediatric Public Health Initiative director Mona Hanna-Attisha and Hurley Foundation president Richard Warmbold today at Hurley Children's Center located inside the Flint Farmers Market at 300 East First Street in Flint.
"Good nutrition is an important part of being healthy and that's especially true for young children, whose bodies are still developing," stated Tracy Henderson, Rite Aid Foundation and Charitable Giving Initiatives director. "The Rite Aid Foundation's support of Hurley Children's Hospital's Nutrition Prescription Program will provide Flint area children with access to fresh fruits and vegetables rich in iron, calcium and Vitamin C, all of which can help reduce the amount of lead absorbed by the body. We are proud to support this unique program, one which we believe helps address long-term effects of Flint water crisis and result in improved health outcomes for Flint area children."
In Michigan, Rite Aid employs more than 4,200 at its 275 stores and distribution center, including 115 associates at its eight stores in the city of Flint.
"Our Flint children deserve every opportunity to be healthy and successful," Hanna-Attisha said. "The creation of Rite Aid's generous donation will further ensure that our children are afforded the interventions to overcome this population-wide lead exposure. With over 15,000 visits per year, the Hurley Children's Center serves the largest number of Medicaid children in Genesee County. This gift allows us to not only encourage better nutrition, but also exposes pediatric patients to nutritious foods, helping to form good eating habits for life while helping mitigate the effects of lead."
Rite Aid has been a longtime supporter of Hurley Children's Hospital through its sponsorship of Children's Miracle Network Hospitals. Since 1994, Rite Aid has raised more than $522,000 for Hurley Children's Hospital.
ABC revenues up 9.3% to $35.7 billion for second quarter
VALLEY FORGE, Pa. – AmerisourceBergen on Thursday reported adjusted diluted earnings per share increased 15.9% to $1.68 for th second quarter ended March 31. Revenue increased 9.3% to $35.7 billion in the quarter, reflecting an 8% increase in Pharmaceutical Distribution revenue.
“I am pleased with the solid performance we delivered in the March quarter,” stated Steven Collis, chairman, president and CEO AmerisourceBergen. “Our recent acquisitions, MWI Veterinary Supply and PharMEDium, have made strong contributions, and excellent performance in our specialty and consulting businesses helped overcome a challenging year over year comparison and the expected decline in generic inflation. In addition, we have extended our contract with our largest pharmacy retail customer for an additional three years, and our large pharmacy benefit manager customer has extended their contract for an additional year.”
The company also announced that its board of directors authorized a new regular share repurchase program which, together with available capacity under the existing regular share repurchase program, permits the company to purchase up to $750 million in shares of its common stock, subject to market conditions. To date in fiscal year 2016, the company has spent $100 million to repurchase shares of its common stock under its regular share repurchase program.
In the second fiscal quarter of 2016, Pharmaceutical Distribution revenues were $34.2 billion, an increase of 8% compared to the same quarter in the prior year. ABDC revenues increased 6%, due primarily to solid organic sales growth from its chain retail and health systems customers. ABSG revenues increased 18%, which was driven by strong performance in the company's oncology business, in its third party logistics business and by sales growth in its blood products, vaccine and physician office distribution businesses.
“Looking ahead, we expect our gross profit in the second half of the year to be negatively impacted by certain accelerating headwinds, including an increase in the rate of generic deflation, and a lower contribution from new generic launches,” Collis said. “In addition, an internal strategic initiative we had launched to increase sales of PRxO Generics and to increase our independent retail segment revenues is ramping slower than we had anticipated. Due to these headwinds, we now expect fiscal year adjusted diluted earnings per share to be in the range of $5.44 to $5.54.”
Those headwinds are expected to continue "well into" fiscal 2017, Collis added. “In addition, recent contract renewals combined with expenses related to some key investments in our information technology systems and infrastructure are expected to negatively impact our growth rate in fiscal 2017. As a result, our preliminary expectation is to grow our fiscal year 2017 adjusted diluted earnings per share in the range of 4% to 6% above the midpoint of our new fiscal 2016 guidance, which includes an approximately 3% negative impact from the [aforementioned] expenses. With our unique position in the market, the talent and expertise we have in key growing areas, the strategic investments we have made and our legacy of operational efficiency and thoughtful capital deployment, I have great confidence that we will successfully navigate the challenges of the changing healthcare landscape.”
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