- McKesson announces a multi-year growth
initiative, focused on creating innovative new solutions that
improve patient care delivery and drive shareholder value.
- Fiscal 2018 Outlook: Adjusted Earnings
of $12.50 to $12.80 per diluted share.
- Preliminary Fiscal 2019 Outlook:
Adjusted Earnings of $13.00 to $13.80 per diluted share.
- The company has scheduled a conference
call for 8:30 AM ET tomorrow, Thursday, April 26, to discuss these
updates.
McKesson Corporation (NYSE:MCK) today announced a multi-year
strategic growth initiative, focused on creating innovative new
solutions that improve patient care delivery and drive incremental
profit growth. The initiative comprises multiple growth pillars,
and includes a comprehensive review of the company’s operations and
cost structure, designed to increase efficiency, accelerate
execution and improve long-term performance.
McKesson’s growth priorities include expanded supply chain and
commercialization services for pharmaceutical and medical supply
manufacturers; enhanced solutions for the rapidly-growing specialty
pharmaceutical market, and; new offerings that will strengthen and
expand the role of retail pharmacy in patient care delivery.
McKesson expects investments in these areas will accelerate the
company’s growth trajectory over the long term.
Investment to support these growth initiatives will be partially
funded by savings from the optimization of McKesson’s operating
model and cost structure. This work will take place in multiple
phases and will encompass key functional areas such as information
technology, finance and human resources.
“McKesson has constantly innovated in response to changing
customer and patient needs,” said John H. Hammergren, chairman and
chief executive officer. “This initiative continues that tradition,
building on our prior successes while focusing on new areas where
we can have the greatest impact on patient care while driving
profit growth. By embracing better ways of working and becoming
more efficient and agile, we can support innovation while creating
more value for customers, patients and shareholders.”
As a preliminary phase of implementing the strategic growth
initiative, McKesson will incur restructuring and other charges in
Fiscal 2019, which will impact the company’s results on the basis
of U.S. generally accepted accounting principles (“GAAP”). This
restructuring plan consists of after-tax GAAP charges that are
estimated to be approximately $150 million to $210 million.
McKesson is also announcing today that it has signed a
definitive agreement to acquire Medical Specialties Distributors
(MSD), a leading national distributor of infusion and
medical-surgical supplies as well as biomedical services to
alternate site and home health providers.
This transaction supports two of the company’s strategic growth
pillars–manufacturer services and specialty–and complements the
company’s existing low-cost site of care infusion platform. MSD’s
established offering to providers in the home infusion market, as
well as technology and services to support customers and patients
using these products, will allow McKesson to provide incremental
services to other customer segments.
The transaction is valued at $800 million, and is expected to
close in the first half of Fiscal 2019, subject to customary
closing conditions, including necessary regulatory clearances.
McKesson expects the transaction will be modestly accretive to
Adjusted Earnings per diluted share in Fiscal 2019.
Fiscal 2018 Outlook
The company has reaffirmed its Adjusted Earnings outlook of
$12.50 to $12.80 per diluted share for the fiscal year ended March
31, 2018. The Adjusted Earnings outlook is anticipated to benefit
primarily from a lower adjusted tax rate and better operational
performance than expected, offset by a pre-tax contribution of $100
million, or $0.31 per diluted share, related to the creation of a
non-profit foundation dedicated to addressing issues stemming from
the nation’s opioid epidemic as previously announced on March 29,
2018.
The company expects the newly-created foundation to focus on
opioid education for patients, caregivers, and providers,
addressing key policy issues, and increasing access to life-saving
treatments, such as opioid overdose reversal medications. Please
visit www.mckesson.com to learn more about the company’s
initiatives to combat the opioid epidemic.
Further, in the fourth quarter, the company preliminarily
estimates recording GAAP after-tax net charges of approximately
$0.6 billion to $1.9 billion. These estimated charges, which will
be reflected in the company’s GAAP results, are driven primarily by
goodwill and long-lived asset impairments related to McKesson’s
European and Rexall businesses and the early repayment of long-term
debt, net of estimated benefits related to adjustments to the
Federal tax reform provisional amounts initially recorded last
quarter.
Preliminary Fiscal 2019 Outlook
McKesson is in the budget development process for Fiscal 2019
and is announcing a preliminary target for Adjusted Earnings of
$13.00 to $13.80 per diluted share.
McKesson will provide detailed financial guidance for Fiscal
2019 when fourth quarter and Fiscal 2018 earnings results are
reported on Thursday, May 24, 2018.
Conference Call Details
The company has scheduled a thirty-minute conference call for
tomorrow, Thursday, April 26, at 8:30 AM ET. The dial-in number for
individuals wishing to participate on the call is 323-794-2551.
Craig Mercer, senior vice president, Investor Relations, is the
leader of the call, and the password to join the call is
‘McKesson’. A telephonic replay of this conference call will be
available for five calendar days. The dial-in number for
individuals wishing to listen to the replay is 719-457-0820 and the
pass code is 7951872. An archive of the conference call will also
be available on the company’s Investor Relations website
at http://investor.mckesson.com.
Dividend Declaration
The company’s Board of Directors today declared a regular
dividend of $0.34 cents per share of common stock. The dividend
will be payable on July 2, 2018, to stockholders of record on June
1, 2018.
Adjusted Earnings
McKesson separately reports financial results on the basis of
Adjusted Earnings. Adjusted Earnings is a non-GAAP financial
measure defined as GAAP income from continuing operations,
excluding amortization of acquisition-related intangible assets,
acquisition-related expenses and adjustments, LIFO
inventory-related adjustments, gains from antitrust legal
settlements, restructuring charges, and other adjustments.
Risk Factors
Except for historical information contained in this press
release, matters discussed may constitute “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934, as
amended, that involve risks and uncertainties that could cause
actual results to differ materially from those projected,
anticipated or implied. These statements may be identified by their
use of forward-looking terminology such as “believes”, “expects”,
“anticipates”, “may”, “will”, “should”, “seeks”, “approximately”,
“intends”, “plans”, “estimates” or the negative of these words or
other comparable terminology. The discussion of financial trends,
strategy, plans or intentions may also include forward-looking
statements. It is not possible to predict or identify all such
risks and uncertainties; however, the most significant of these
risks and uncertainties are described in the company’s Form 10-K,
Form 10-Q and Form 8-K reports filed with the Securities and
Exchange Commission and include, but are not limited to: changes in
the U.S. healthcare industry and regulatory environment; managing
foreign expansion, including the related operating, economic,
political and regulatory risks; changes in the Canadian healthcare
industry and regulatory environment; exposure to European economic
conditions, including recent austerity measures taken by certain
European governments; changes in the European regulatory
environment with respect to privacy and data protection
regulations; fluctuations in foreign currency exchange rates; the
company’s ability to successfully identify, consummate, finance and
integrate acquisitions; the company’s ability to manage and
complete divestitures; material adverse resolution of pending legal
proceedings; competition and industry consolidation; substantial
defaults in payment or a material reduction in purchases by, or the
loss of, a large customer or group purchasing organization; the
loss of government contracts as a result of compliance or funding
challenges; public health issues in the U.S. or abroad;
cyberattack, natural disaster, or malfunction of sophisticated
internal computer systems to perform as designed; the adequacy of
insurance to cover property loss or liability claims; the company’s
failure to attract and retain customers for its software products
and solutions due to integration and implementation challenges, or
due to an inability to keep pace with technological advances; the
company’s proprietary products and services may not be adequately
protected, and its products and solutions may be found to infringe
on the rights of others; system errors or failure of our technology
products or services to conform to specifications; disaster or
other event causing interruption of customer access to data
residing in our service centers; the delay or extension of our
sales or implementation cycles for external software products;
changes in circumstances that could impair our goodwill or
intangible assets; new or revised tax legislation or challenges to
our tax positions; general economic conditions, including changes
in the financial markets that may affect the availability and cost
of credit to the company, its customers or suppliers; changes in
accounting principles generally accepted in the United States of
America; withdrawal from participation in multiemployer pension
plans or if such plans are reported to have underfunded
liabilities; inability to realize the expected benefits from the
company’s restructuring and business process initiatives;
difficulties with outsourcing and similar third party
relationships; risks associated with the company’s retail
expansion; and the company’s inability to keep existing retail
store locations or open new retail locations in desirable places.
The reader should not place undue reliance on forward-looking
statements, which speak only as of the date they are first made.
Except to the extent required by law, the company undertakes no
obligation to publicly release the result of any revisions to these
forward-looking statements to reflect events or circumstances after
the date hereof, or to reflect the occurrence of unanticipated
events.
Shareholders are encouraged to review the company’s filings with
the Securities and Exchange Commission.
About McKesson Corporation
McKesson Corporation, currently ranked 5th on the FORTUNE 500,
is a global leader in healthcare supply chain management solutions,
retail pharmacy, community oncology and specialty care, and
healthcare information technology. McKesson partners with
pharmaceutical manufacturers, providers, pharmacies, governments
and other organizations in healthcare to help provide the right
medicines, medical products and healthcare services to the right
patients at the right time, safely and cost-effectively. United by
our ICARE shared principles, our employees work every day to
innovate and deliver opportunities that make our customers and
partners more successful — all for the better health of patients.
McKesson has been named the “Most Admired Company” in the
healthcare wholesaler category by FORTUNE, a “Best Place to Work”
by the Human Rights Campaign Foundation, and a
top military-friendly company by Military Friendly. For
more information, visit www.mckesson.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20180425006642/en/
McKesson CorporationCraig Mercer, 415-983-8391 (Investors and
Financial Media)Craig.Mercer@McKesson.comKristin Hunter Chasen,
415-983-8974 (General and Business
Media)Kristin.Chasen@McKesson.com
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