Cencora, Inc.

Hello everyone and thank you for your patience. Today's SENCORA Q4 full year 2024 earnings call will begin shortly. During today's call we will have a Q&A session. If you would like to register a question please press star followed by one on your telephone keypad and if you wish to withdraw your question then it is star followed by two. Thank you. Hello everyone and welcome to today's Suncora Q4 full year 2024 earnings call. My name is Drew and I'll be the operator today. During today's call there will be a Q&A session. If you wish to ask a question please press star followed by one on your telephone keypad and if you wish to withdraw your question then it is star followed by two. I'll now hand over to our first speaker Bennett Murphy. Please go ahead when you're ready.

Thank you, good morning, good afternoon, and thank you all for joining us for this conference call to discuss Sancora's fiscal 2024 fourth quarter and full year results. I am Bennett Murphy, Senior Vice President, Head of Investor Relations and Treasury. Joining me today are Bob Motch, President and CEO, and Laz Krikorian, Senior Vice President and Chief Accounting Officer. On today's call, we will be discussing non-GAAP financial measures. Reconciliations of these measures to GAAP are provided in today's press release, which is available on our website at investor.sancora.com. We have 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-GAAP basis, including but not limited to EPS, operating income, and income tax. Forward-looking statements are based on management's current expectations and are subject to uncertainty and change. For discussion of key risk and assumptions, we refer you to today's press release and our SEC filings, including our most recent 10-K. Sancora assumes no obligation to update any forward-looking statements, and this call cannot be broadcast without the express permission of the company. You will have an 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 will turn the call over to Bob.

Thank you, Bennett. Hi, everyone, and thank you for joining Sancora's fiscal 2024 fourth quarter earnings call. Before we get started today, I'd like to let everyone know that our CFO, Jim Cleary, has been under the weather for the past few days after successfully and impressively completing the New York City Marathon. Jim is unable to join the call today, but he was part of preparing today's remarks, which will be presented by our Chief Accounting Officer, Laz Krikorian. We wish Jim a speedy recovery, and I know he is looking forward to engaging with everyone in the coming weeks. It's a pleasure to be speaking with you today for the first time since assuming the role of president and CEO of this incredible company. To discuss the strong results our global enterprise has delivered this year, including growing our adjusted earnings by 15%. I'm honored to take the helm of a purpose-driven, growth-oriented business with an unparalleled portfolio of customers ranging from pharmaceutical companies to healthcare providers across continents. I'm focused on continuing to execute our strategy while amplifying the things within our culture that have made us successful. In fiscal 2024, Sencor continued to benefit from the strength of our customer relationships, the capabilities of our business, our international footprint, and the collective expertise of our team members. This year, we made important progress by investing in our core distribution infrastructure, deepening strategic partnerships, leveraging data and analytics, and continuing to build on our strength and specialty. Specialty has been a key differentiator for Sancora for decades, and specialty pharmaceuticals are now everywhere across our business, an important part of almost every customer relationship. As we engage with customers, they're focused on specialty products and how Sancora can help them. This is true for physicians, health systems, specialty pharmacies, and now also for community pharmacy as patients are accessing GLP-1s locally. While GLP-1s represent economic challenges in the pharmaceutical supply chain, they're an important innovation, and pharmacists handling these products are helping to drive positive outcomes for patients, particularly those with comorbidities, which is an important proof point for the industry. Pharmaceutical innovation continues to advance patient care, and Sankora has the capabilities and resources to enable us to partner with our leading customers upstream and downstream. In fiscal 2023, we talked about how our investment in One Oncology was a natural evolution of our leadership and specialty. As the addition of a management services organization, or MSO, in the oncology space expanded the solutions we provide an important community provider customer base. This morning, I'm excited to talk about our agreement to acquire Retina Consultants of America, or RCA, a clear leader in the retina MSO space. which broadens our community provider relationships in a high-growth segment. In addition to being a proven, established MSO, RCA has differentiated clinical research capabilities that we believe will build on CENCOR's value proposition to pharma, supporting innovative new therapies and furthering our ability to contribute to better outcomes for patients. This acquisition fits squarely in CENCOR's pharmaceutical-centric strategy and furthers our ability to execute on our strategic imperatives of leading with market leaders, investing in innovation, contributing to prescription outcomes, and expanding on our leadership and specialty. We've developed deep relationships with RCA's leadership over the years as we've served their practices. Their clinical excellence and focus on pharmaceutical innovation align closely with Sencor's purpose and strategy. Community providers face an increasingly complex operating environment. By aligning with Sancora, a partner that supports the voice and leadership of physicians, they are better able to navigate changes, advance their growth, and focus on providing patient care. Sancora's global distribution infrastructure is the backbone of our business. We continue to invest in our distribution centers to support the logistics needs presented by pharmaceutical innovation and focus on utilizing technology to create actionable data and insights for our partners. In the US we've made investments in our distribution infrastructure to support the increasing amount of temperature control volume we handle and to increase the level of granularity on traceability and product specific movement. Through our data driven approach we're focused on creating actionable insights that allow manufacturers to strengthen their processes increase efficiencies and comply with the latest industry regulatory standards. This is an example of Sancora's forward-thinking mindset and ability to not only adapt to industry changes, but capitalize on and expand the role we play. Healthcare is dynamic, which creates opportunities for us to leverage our growing strengths and expertise to advance clinical and business objectives of our customers. By aligning ourselves with the right strategic partners and prioritizing key markets, we're able to grow with our customers and develop innovative solutions. Listening and responding to customers is table stakes. We will actively learn, understanding deeply the strategies of our partners, allowing us to anticipate their needs, both opportunities and challenges they are facing now and into the future. As an example, for our health systems customers, we have enhanced the services we provide to help accelerate pharmacy solutions by developing a unified portfolio to optimize operations, improve financial performance, and expand care. One example of our enhancements is the increased support we now offer during the procurement process. These enhanced services leverage advanced analytics to provide customer transparency, opportunities to drive product and cost efficiency, and evaluate and mitigate risk, all to enhance the customer experience. Internationally, we've been strategically investing in the distribution center network of our European wholesale and 3PL businesses to increase the level of automation and enhance our capabilities to improve business continuity. Outside of distribution, our global specialty logistics business continues to navigate a challenging market, operating efficiently while we continue to invest in solutions to support clinical innovation across geographies. And unfortunately, As you saw in the earnings release this morning, we took a goodwill impairment on our PharmaLex business. The business growth is not keeping up with our original expectations as the outsourced pharma services market faces broader demand challenges. PharmaLex remains a key long-term strategic asset and our ability to differentiate our commercialization solutions with our pharma and biotech partners, and we are confident in our ability to grow the business. As the market rebounds, we are positioned as a partner of choice to enhance new product development and commercialization through a compelling suite of services from clinical trial support to regulatory, scientific affairs, and pharmacovigilance, specialty logistics, market access, as well as our 3PL and distribution reach across continents. I'm confident in Sencor's ability to drive success across our enterprise because of the strength of our talent. I want to take a moment to thank the global core team members who drive our business objectives, capture opportunities with our partners and customers through their close collaboration, and perform their work with a purpose-driven mindset. I'm honored to be working alongside and learning from each of our team members whose expertise and excellence in their work drive us forward. Our most important investment is in our people. and I've seen how diverse teams with differing perspectives create the best results. So as we think about fiscal 2025 and the future of Sankora, we will prioritize building on our strong team to continue our track record of impressive performance. Our enterprise leadership team's responsibility is to equip our team members with resources to perform best-in-class work, and I'm committed to supporting them. Having been in this role for a little over a month now, I'm continuously asked, what's next for Sancora? Sancora is an incredible purpose-driven company guided by a differentiated strategy, culture, and a portfolio of solutions across geographies, which has allowed us to build strategic customer partnerships and consistently deliver strong results. Thinking about fiscal 2025 and beyond, we will continue to lead with a customer-centric approach Take on an enterprise powered mindset and focus on innovation, which will ensure our differentiated value proposition remains intact and accelerates our position as a leader in healthcare. On the talent side, we have strong leadership and we've taken steps to evolve the leadership team to help deliver on this focus. Adding new external hires, including a new chief data and information officer, as well as a new head of strategy and corporate development. We've also elevated existing commercial leaders to ensure that we continue to bring the voice of the customer to the table. In closing, CENCOR has an incredible foundation built on the strength of our strategy. We're well positioned in key services and solutions with our core and pharmaceutical distribution and complimentary services for our upstream and downstream customers. Our global operations allow us to integrate our solutions across the markets we serve to create differentiated capabilities. I'm inspired by our team members' pride in their work and deep dedication to our purpose. We are united in our responsibility to create healthier futures. With that, I'll now turn the call over to Laz for an in-depth review of fourth quarter and full year Fiscal 24 results, as well as Fiscal 2025 guidance. Laz?