Item 7.01. Regulation FD Disclosure.
As previously announced, on
The information below includes financial measures of the Company that are not
calculated in accordance with accounting principles generally accepted in
The table below the information reconciles non-GAAP adjusted EBITDA to the most
directly comparable financial measure calculated and presented in accordance
with GAAP.
This non-GAAP financial measure, non-GAAP adjusted EBITDA, has limitations as an
analytic tool and should not be considered in isolation or as a substitute for
net income or any other measure of financial performance reported in accordance
with GAAP.
Information:
• Net sales growth, adjusted for the impact of declines in theU.K. andGermany , was 4% for supply chain services, 24% for prescription management, and 2% for software services for the twelve months endedJune 30, 2022 . • Non-GAAP adjusted EBITDA for the twelve months endedJune 30, 2022 was$249 million for supply chain services,$54 million for prescription management, and$34 million for software services. • As a percentage of sales, non-GAAP adjusted EBITDA for the twelve months endedJune 30, 2022 was 6.2% for supply chain services, 9.6% for prescription management, and 33.9% for software services. • Net sales for the Company's proprietary brands were approximately$400 million for the year endedDecember 31, 2021 , reflecting net sales growth of 1.2% and 13.6% for the years endedDecember 31, 2020 and 2021, respectively. • The Company has identified$31.4 million of operational cost savings related to distribution, procurement, and general and administrative expenses that are expected to be realized over the next four years.
Reconciliation of Non-GAAP Financial Measure:
Non-GAAP adjusted EBITDA adjustments include share-based compensation, strategic consulting, separation programs and executive severance, equity method investments and non-consolidated affiliates, other impairments, and other items, net.
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Supply Chain Prescription Software Services Management Services Operating income (loss) 159 (60 ) 18 Plus: Depreciation and Amortization 52 103 10 Plus: Other, net, equity in earnings of affiliates, and net loss (income) attributable to redeemable non-controlling interests 7 1 (1 ) Earnings (loss) before interest, taxes, depreciation, and amortization (EBITDA) 218 44 27 Plus: Share-Based Compensation 16 9 1 Plus: Strategic Consulting 1 - - Plus: Separation programs and executive severance 11 1 - Plus: Equity method investments and non-consolidated affiliates 4 - - Plus: Other Impairments 1 - 6 Plus: Other items, net (2 ) - - Non-GAAP Adjusted EBITDA$ 249 $ 54$ 34
Rounding adjustments applied to individual numbers shown in this Report may result in these figures differing immaterially from their absolute values.
The information furnished with this Current Report on Form 8-K constitutes only
a portion of the presentation materials being utilized in the lender
presentation and is summary information that should be considered in the context
of the Company's filings with the
The information in this Item 7.01 is furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, except in the event that the Company expressly states that such information is to be considered filed under the Exchange Act or incorporates it by specific reference in such filing.
Certain statements and information in this Current Report on Form 8-K may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "anticipate," "guidance," "plan," "potential," "expect," "should," "will," "forecast," "target" and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current expectations, assumptions and/or beliefs concerning future events. As a result, these forward-looking statements rely on a number of assumptions, forecasts and estimates, and therefore, these forward-looking statements are subject to a number of risks and uncertainties that may cause the Company's actual performance to differ materially from that projected in such statements. Such forward-looking statements may include, but are not limited to, statements concerning our ability to achieve potential costs savings and synergies, quality of earnings benefit and other performance expectations.
Among the factors that could cause actual results to differ materially include,
but are not limited to, the occurrence of any event, change or other
circumstances that could give rise to the termination of the Merger Agreement,
including a termination under circumstances that could require the Company to
pay a termination fee to Parent; the inability to complete the Merger due to the
failure to obtain shareholder approval for the adoption of the Merger Agreement
or the failure to satisfy other conditions to completion of the Merger; risks
related to disruption of management's attention from the Company's ongoing
business operations due to the Merger; the effect of the announcement of the
Merger on the Company's relationships with its customers, operating results and
business generally; the risk that the Merger will not be consummated in a timely
manner or at all, and the risk that if the Merger is not completed, the market
price of the Company common stock could decline; the potential for political,
social, or economic unrest, terrorism, hostilities or war, including the war
between
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pharmacies; the ability to achieve performance targets, including managing the Company's growth effectively; the ability to launch new products; the ability to successfully integrate acquisitions, operations and employees; the ability to continue to execute on the Company's strategic plan; the ability to attract and retain key personnel; the ability to manage relationships with the Company's supplier and distributor network, including negotiating acceptable pricing and other terms with these partners; the ability to attract and retain customers in a price sensitive environment; the ability to maintain quality standards in the Company's technology product offerings as well as associated customer service interactions to minimize loss of existing customers and attract new customers; access to financial markets along with changes in interest rates and foreign currency exchange rates; changes in the legislative landscape in which the Company operates, including potential corporate tax reform, and the Company's ability to adapt to those changes as well as adaptation by the third-parties the Company is dependent upon for supply and distribution; the impact of litigation, including litigation related to the Merger; the impact of accounting pronouncements, seasonality of the Company's business, leases, expenses, interest expense, and debt; sufficiency of cash and access to liquidity; and cybersecurity risks, including risk associated with the Company's dependence on third party service providers as a large portion of its workforce is working from home.
See also the "Risk Factors" in the Company's Quarterly Report on Form 10-Q for
the quarterly period ended
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