AmerisourceBergen Corporation

Good day and welcome to the Amerisource Bergen Q4 FY20 earnings 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 your touchtone phone. Again, that is star then one. To withdraw 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. Please go ahead.

Bennett Murphy Thank you. Good morning and thank you all for joining us for this conference call to discuss AmerisourceBergen's fiscal 2020 fourth quarter and full year 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 will be discussing non-GAAP financial measures. Reconciliations of these financial measures to GAAP are provided in today's press release and are also available on our website at investors.amazonsbergen.com. We've also posted a slide presentation to accompany today's press release on our investor website. During this conference call, we will make forward-looking statements about our business and financial expectations on an adjusted, non-gap basis, including but not limited to EPS, operating income, and income taxes. Forward-looking statements are based on management's current expectations and are subject to uncertainty and change. For discussion of key risks and assumptions, we refer you to today's press release and our SEC filings, including our most recent Form 10-K. Mayor Schiffberger assumes no obligation to update any forward-looking statements, and this call cannot be rebroadcast without the express permission of the company. You have an opportunity to ask questions after today's remarks by management. We ask that you limit your question to one per participant in order for us to get to as many participants as possible within the hour. With that, I will turn the call over to Steve. Thank you, Dennis, and good morning to everyone on the call.

Today we will be discussing AmerisourceBergen's strong performance in fiscal 2020 and our expectations for fiscal 2021. Importantly, we would like to start by first of all acknowledging the exceptional efforts of our associates to support our customers and help them navigate the challenges stemming from the COVID-19 pandemic. In fiscal 2020, we once again delivered strong performance to enlarge our continued ability to innovate and execute, and the inherent resilience of our business. Driven by our purpose and guiding principles, our associates stepped up whenever we challenged to address the unprecedented circumstances facing our industry. Thanks to them, we've been able to meet stakeholder needs while enabling the continuity and stability of the supply chain. and demonstrating the vital nature of our role in the health system as an invisible platform for pharmaceutical innovation and access. When the COVID-19 pandemic first emerged, we put the health, safety, and well-being of our associates and customers first. We implemented enhanced team protocols and supported associates by providing additional paid time off for associates needing to quarantine or care for family members. bonuses for frontline associates, and backup dependent care. We also shifted all suitable roles to remote work. Feedback from our associates on these measures have been overwhelmingly positive. More than 90% of associates surveyed say communication, collaboration, and creativity and innovation have remained the same or better. We also understood and appreciated our opportunity to deliver on our purpose and be part of the solution, given our central role in the supply chain. In addition to our normal supply apportionment process, our teams have ensured that critical medications are allocated on a prioritized basis to facilitate patient access. On the pharmaceutical distribution side, our ability to provide real-time data and analytics has helped facilitate actionable channel solutions and awareness for commercial and government stakeholders. At World Korea, our team has been helping manufacturer partners navigate the complexity of moving materials across the globe with limited global air traffic, while also enabling innovation with clinical trials in at-home settings. We believe the strength of AmerisourceBergen's diverse portfolio, combined with our dynamic operating agility, have demonstrated our business's resilience and our longstanding commitment to robust business continuity planning and investment. Our stakeholders now have an even greater appreciation for our vital role in the supply chain and in the healthcare system overall. I'm especially proud of the inspiration and diligent efforts of our associates, We have supported our customers with increased collaboration and innovative solutions, ensuring that they are able to meet patient needs, even as they adapted to the new environment. I would now like to comment on some of the recent developments regarding the potential global framework for opioid litigation resolution. We have made significant progress in the fourth quarter towards reaching a potential settlement to resolve opioid lawsuits. As a result, the company determined it was appropriate to accrue for this potential settlement based on a framework that we think is workable for all the relative parties. Advanced discussions are ongoing, and we are not able to comment deeply on the matter at this time. We take comfort from our belief that settlement funds will be used in support of initiatives to combat the opioid epidemic, including treatment, rehabilitation, mental health, and other important efforts. As you all know, we have been consistent in stating our desire to be a part of the solution to address the enormity of the opioid challenge. We always have and will continue to take our role in the supply chain seriously and continue to work diligently and alongside our industry partners and government and state agencies to combat drug diversions. We will also continue to support real solutions to help address the crisis in the communities we serve, work in, and call home. Just to reiterate, we believe that this is an important step towards resolution, which would allow our business and our people to focus on performing our vital role in the healthcare system, which has been clearly on display during the COVID-19 pandemic. Looking ahead, Amerisource Bergen enters fiscal 2021 with strong momentum as our key differentiators continue to provide a platform for value creation for all our stakeholders. First, we have the best customer base in the industry with a balanced portfolio of key active customers across all the segments in which we operate. With our diverse and extensive customer base, Amerisource Bergen is well positioned to support patient access wherever a prescription is needed. Today, I would like to highlight our Good Neighbor Pharmacy network of independent pharmacies. In September, we held our first virtual ThoughtSpot, our annual Good Neighbor Pharmacy conference and trade show. Through our ThoughtSpot, I was inspired by the unwavering commitment that our GST pharmacies have maintained with their patients and communities. They have gone above and beyond with their entrepreneurial spirit and adapted to the pandemic environment with innovations such as leveraging social media to engage with their patients, making and distributing hand sanitizers to all supply guests, and adapting to enable drive-through prescriptions. We share this purpose-driven mindset of our GMP qualities and will continue to support all of our customers by understanding their needs, delivering a seamless experience, and deepening our relationship with them. Second, We continue to build on AmerisourceBurn's unparalleled leading specialty franchise. Enhanced by the value-added services we provide, our specialty physician services business has the strongest portfolio of service and customer relationships in the industry. Our position in the market enables us to capitalize on emerging trends, such as the rise of biosimilars, where we saw better-than-expected adoption and growth this year. and which has become a meaningful and growing part of our business. A recent IQVIA report focused on biosimilars highlighted these strong utilization trends, expected overall growth for biosimilars, and the corresponding savings that they will create for the healthcare system. The growth of biosimilars is a long-term driver for Amerisource's building, as we are able to provide valuable commercialization services upstream to manufacturers and support access downstream to community-based providers. Specialty has been an important driver of Marisol Bergen's growth over the last few years, and in fiscal 2021, we are focused on furthering our value proposition and supporting our specialty physician customer base by continuing to invest in technology, innovation, and data and analytics solutions. Our ability to continuously innovate is our third differentiator. We embrace advanced technologies to enable real-time communication and transparency for our partners. Our sourcing and distribution teams integrate their commercial expertise with our data and analytics capabilities to provide actionable channel insights to our provider and manufacturer partners and government stakeholders. Earlier this week, Amerisource Bergen was selected by the Department of Health and Human Services to store, manage, and distribute pharmaceuticals for the Strategic National Stockpile. We take great pride in being chosen to support the government in their planned pharmaceutical stockpile activity. AmerisourceBergen is a trusted data provider in the pharmaceutical supply chain, with stakeholders across the health system used to enable data-driven solutions to new and existing challenges. We also continue to build upon our partnerships to become even more efficient and to serve our customers with greater speed, efficiency, and data capabilities. Having an innovative mindset means that not only do we seek creative ways to solve problems, but also that we are decisive and nimble to apply our capabilities. During the pandemic, for example, we quickly launched telehealth tools with various workflow platforms and other technology solutions, helping providers across our customer spectrum, from specialty physician services to MWI Animal Health, adapt to the new environment. AmeriSource will remain solutions-oriented and committed to providing value-added innovations and services so that our customers can take advantage of the opportunities available in this rapidly evolving market. Finally, turning to our fourth differentiator, we have a history of successful corporate stewardship. On the financial side, we have maintained our thoughtful and strategic approach to capital deployment with a focus on value creation and maintaining financial strength. This fiscal year, we invested $370 million in the business through capital expenditures while at the same time returning more than $760 million shareholders through dividends and sharing purchases. On the PTO community side, we are guided by our purpose. We engage our associates, operate in a sustainable and responsible manner, and support healthy and resilient communities where we live and work. We are making positive improvements for the environment and in our communities. In the last year, we have reduced greenhouse gas emissions by more than 5%. Earlier, I mentioned associate satisfaction with our COVID response. We've also seen a marked improvement in engagement on topics of personal importance, such as diversity and inclusion. Membership in our employee resource groups, for example, has increased by more than 40% year over year. In addition, inspired by our recent conversations with associates around social injustice and racial inequity, We have exciting plans for more diversity and inclusion initiatives in the coming year. Just this week, we appointed a new Chief Diversity and Inclusion Officer, and we look forward to working with him to continue our progress and focus in this important area. There is value generated by the power of difference, and we believe that fostering an environment that embraces diversity, inclusion, and addressing unconscious bias advances our purpose and our culture. making us an even better Amerisource program. As we enter fiscal 2021, the evolving healthcare landscape continues to offer opportunities for Amerisource programs to leverage our strengths and capitalize on our unique position in the market. We are focused on several key objectives. Supporting growth across the enterprise by enhancing our marketing specialty portfolio of innovative customer-centric services and solutions. deepening our strong strategic partnerships. Furthering our execution excellence by reinforcing our ability to deliver best-in-class service and efficiency. Three, continuing to strengthen our fellowship experience with a concerted effort to advance our talent and culture. And fourth, evolving our technology and communications to further the interoperability of our businesses and to become an even more unified AmeriSource firm. Most of all, we remained purpose-driven and well-positioned to create significant stakeholder value. Our businesses and teams rose to the challenges of the year and went above and beyond to deliver support and results for our customers and their patients. Thank you to our associates for their dedication, inspirational efforts, and execution, and for remaining united in our responsibility to create healthier futures Now I will turn the call over to Jim for more in-depth review of our fourth quarter and fiscal 2020 results and to provide fiscal 2021 guidance. Jim?