AmerisourceBergen Corporation

Good day and welcome to the AmeriSource Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To answer your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Bennett Murphy, Head of Investor Relations. Please go ahead, sir.

Thank you. Good morning, and thank you all for joining us for this conference call to discuss Amerisource Bergen's fiscal 2020 second quarter results. I am Bennett Murphy, Senior Vice President, Investor Relations, and joining me today are Steve Collis, Chairman, President, and CEO, and Jim Cleary, Executive Vice President and CFO. On today's call, we'll be discussing non-GAAP financial measures. Reconciliations of these measures to GAAP are provided in today's press release and are also available on our website at investor.americasourcebergen.com. We've also posted a slide presentation to accompany today's press release to our website. During this conference call, we make forward-looking statements about our business and financial expectations on an adjusted, non-GAAP basis, including but not limited to EPS, operating income, and free cash flow. Forward-looking statements are based on management's current expectations and are subject to uncertainty and change. For a discussion of key risks and assumptions, we refer you to today's press release, our SEC filings, including our most recent 10-K. Mayor George Bergen assumes no obligation to update any forward-looking statements on this call, and this call cannot be rebroadcast without the express permission of the company. You will have the opportunity to ask questions after today's remarks by management. We ask that you limit your questions to one per participant in order for us to get to as many participants as possible within the hour. With that, I'll turn the call over to Steve.

Thank you, Venice, and good morning to everyone on today's call. As you saw from our earnings release, Amerisource Bergen delivered excellent performance for the second quarter and first half of fiscal 2020. With a strong first half of the year behind us, I will focus this morning's call on two main areas. First, we will discuss Amerisource Bergen's actions in response to the COVID-19 pandemic, and second, We will talk about how Marisol's Bergen is positioned to deliver value over the long term for our shareholders and also for our associates, customers, suppliers, and our communities. Jim will then discuss our results in more detail and our outlook for the remainder of the year. First, with regard to the actions we have taken in response to the COVID-19 pandemic, I've never been prouder of a Marisol's Bergen and our associates. We have been guided by our purpose and values and the company has prioritized supporting the safety of our associates. In turn, our associates have been innovating in helping our manufacturer and provider customers navigate new or intensified challenges. The health, safety and well-being of our associates is paramount and we have taken several steps to support our frontline associates, which have included enhanced cleaning protocols and additional support from third-party cleaners, enhanced pay time for associates needing to quarantine or care for family members, weekly bonuses for frontline associates, and backup dependent care. These measures are important in protecting and supporting our associates and key to Marisol Spurgeon's ability to support the foundational elements of healthcare. As you can imagine, The necessity of our services and solutions has been highlighted and amplified as manufacturers and providers navigate increased complexity and new challenges. To help efficiently and effectively address these challenges head-on, we established an internal response task force that is made up of key experts and leaders across the company. Our task force has been advising individual teams and leaders and also meets with government officials. Task Force help us move quickly to implement our business continuity plans, which are enabled by the robustness of our distribution network, technology, and the talent and innovation of our associates. The strength of our infrastructure has enhanced our ability to provide patients access to the medications they need. Amerisource Bergen has a history of investing in our businesses and capabilities, giving technological and operational flexibility. Last month we demonstrated this when we temporary closed one of our largest distribution centers out of an abundance of caution given its proximity to a COVID-19 hotspot. We invoked our business continuity plan for the region and seamlessly transferred volumes to other AmerisourceBergen distribution centers. We used the temporary closure to perform extensive sanitation measures at the location. AmerisourceBergen also moved the size of LeaderProtect non-frontline associates. We were able to quickly shift all suitable roles to working remotely. This important distancing measure was achieved as a result of close leadership collaboration and strong IT infrastructure. The types of proactive measures would not be possible without the significant investments we have made in our distribution center network and technology. On the pharmaceutical supply side, our sourcing and commercial teams have worked diligently to ensure that we are understanding demand and forecasting sustainability of supply to maintain the necessary inventory to address varying needs. We have made it a priority to keep in regular communication with all stakeholders to best maintain continuity of supply and meet increased demand from providers. This has been a period when alignment and coordination is vital, and we have amplified our proactive approach to communications and engagement. Our teams have held numerous customer virtual town halls in order to discuss factors influencing the supply chain, outline our response and business continuity, and articulate the resources available to our customers. These events have facilitated reach to thousands of participants and are a good example of AmerisourceBergen's calm, transparent, and patient-focused response. Despite these uncertain times, I have been inspired daily by the dedication, innovation, and thoughtfulness displayed by AmerisourceBergen associates. We have seen firsthand the importance of our purpose-driven organization especially given the vital role AmerisourceBergen plays in the healthcare system. It is times like these that reinforce our confidence in AmerisourceBergen's strategic position, resiliency, and ability to provide critical services and solutions in any economic climate. Over the years, we have focused much of our time with investors and analysts on providing visibility into AmerisourceBergen's four strategic pillars. While the world around us has changed the way we are now working, the way we connect, and the way we communicate, the key differentiators that set AmerisourceBergen apart remain a constant. Let me remind you of them and why they underscore our confidence in our strategic positioning. First, we have a diverse portfolio of customers with key anchor relationships in each segment. We have built and nurtured long-standing and collaborative partners with a diverse group of customers, ranging from community and national retailers to health systems and community physicians. An example from one of these customer groups is our Good Day for Pharmacy, where members have been working tirelessly on the front lines to ensure their patients continue getting the care they need, even when things are at their most chaotic. Whether by creating care packages for at-risk customers, providing drive-thru services, donating hand sanitizer, or keeping in touch with patients via social media, our independent pharmacy partners have done an exemplary job of showcasing the crucial part they play in improving community health. These types of relationships enable us to capitalize on pharmaceutical utilization in the United States across a variety of settings and distribution channels. Second, we maintain market-leading positions in specialty distribution and services, where pharmaceutical innovation and demographic trends will continue to drive long-term growth. During this period of social distancing, we've been working with our provider customers to help them navigate the complexity of operating in this environment understanding that there are some natural delays in patients seeing doctors for necessary referrals. We believe the availability of testing and improved operability of practices will enable these practices to serve more efficiently the complex needs of their new and existing patients. We have worked closely with our community physician practices to provide advanced analytics to help them navigate the temporary slowdown patient visits due to social distancing. At the same time, our commercialization teams are working closely with their manufacturer partners to support efforts to ensure patients continue to be able to access vital pharmaceutical therapies. Our LASH business has been supporting a partners program that helps eligible unemployed patients maintain access to therapy despite loss of health insurance due to COVID-19. Additionally, World Courier's capability to provide direct-to-patient clinical trial services has been a key asset in supporting the shift of healthcare out of hospitals and into the home, thereby lowering the burden on hospitals and pharmacies. As complexity increases, World Courier thrives as its capabilities are unparalleled in its market. Navigating complexity is a foundational trait of AmeriSource Bergen, and it powers our third key differentiator, our ability to provide innovative services and solutions. We proactively invest and innovate to be best-in-class partners, as evidenced by the foresight that guided us to dedicate capital expenditures in our distribution center network, IT capabilities, and specialized customer-focused solutions. One such example is a tool we are using to provide the advanced analytics for our community physician customers. Physician practices are leveraging our strategic financial intelligence solution InfoGuard to monitor and evaluate potential area of concern. Given the current situation, we are providing analyses to monitor areas impacted by COVID-19, such as new patient volume, transition to telehealth services, and potential delays in claims processing and payments. At MWI, our team recognized that the need for veterinarian practices to virtually engage with their clients has become critically important. In response, the business announced a series of technology tools to provide improved remote communication and enable curbside operations for practices and their patients. These examples illustrate the core strength for AmerisourceBergen. Our talent, expertise and resources facilitate our ability to provide comprehensive solutions. Finally, AmerisourceBergen continues to be a strong corporate steward with a focus on advancing talent and culture and maintaining strong financial health. Our talent and culture have been on full display in these recent weeks. delivering unparalleled value for all our stakeholders. We have heard from individuals across the organization that they are proud to work for a company like Ameris Horse Bourbon, with our priority on our purpose and values, especially during times of great societal need. At the same time, the financial health of the organization remains unchanged, with one of the strongest balance sheets in company history and a continued focus on cash flow generation. This financial stability and strength provides AmerisourceBergen with the flexibility and firepower to navigate the current environment effectively and continue to deploy capital appropriately in order to provide long-term value for all our stakeholders. Now I will turn the call over to Jim to discuss our second quarter results and revised outlook for fiscal 2020. Jim?