<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE FISCAL QUARTER ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
COMMISSION REGISTRANT, STATE OF INCORPORATION IRS EMPLOYER
FILE NUMBER ADDRESS AND TELEPHONE NUMBER IDENTIFICATION NO.
- ----------- ---------------------------------- ------------------
<S> <C> <C>
33-27835-01 AmeriSource Health Corporation 23-2546940
(a Delaware Corporation)
(formerly AmeriSource Distribution
Corporation)
P.O. Box 959, Valley Forge,
Pennsylvania 19482
(610) 296-4480
</TABLE>
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES [X] NO [_]
The number of shares of common stock of AmeriSource Health Corporation
outstanding as of March 31, 1996 was: Class A--11,995,206, Class B--9,896,041;
Class C--279,439 .
<PAGE>
INDEX
AMERISOURCE HEALTH CORPORATION
<TABLE>
<C> <S>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets--March 31, 1996 and September 30, 1995
Consolidated statements of operations--Three months ended March 31,
1996 and March 31, 1995
Consolidated statements of operations--Six months ended March 31,
1996 and March 31, 1995
Consolidated statements of cash flows--Six months ended March 31,
1996 and March 31, 1995
Management's Discussion and Analysis of Financial Condition and
Item 2. Results of Operations
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
</TABLE>
2
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. AMERISOURCE HEALTH CORPORATION FINANCIAL STATEMENTS (UNAUDITED)
AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
MARCH 31, SEPTEMBER 30,
1996 1995
----------- -------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents........................... $ 63,833 $ 32,171
Restricted cash..................................... 6,102 14,638
Accounts receivable less allowance for doubtful
accounts: 3/96--$13,548, 9/95--$12,941............. 340,272 318,652
Merchandise inventories............................. 590,675 404,522
Prepaid expenses and other.......................... 3,714 3,221
---------- --------
Total current assets.............................. 1,004,596 773,204
Property and Equipment, at cost....................... 85,985 76,826
Less accumulated depreciation....................... 35,432 31,582
---------- --------
50,553 45,244
Other assets.......................................... 27,983 20,225
---------- --------
$1,083,132 $838,673
========== ========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
MARCH 31, SEPTEMBER 30,
1996 1995
----------- -------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable................................... $ 609,607 $ 462,804
Accrued expenses and other......................... 25,368 27,720
Accrued income taxes............................... 17,357 13,596
Deferred income taxes.............................. 32,809 25,892
---------- ---------
Total current liabilities........................ 685,141 530,012
Long-Term Debt:
Revolving credit facility.......................... 215,000 150,000
Receivables securitization financing............... 209,860 209,842
Senior debentures.................................. 74,293 74,293
Other debt......................................... 1,697 1,629
---------- ---------
500,850 435,764
Other Liabilities.................................... 7,518 8,621
Stockholders' Equity
Common Stock, $.01 par value:
Class A (Voting and convertible):
50,000,000 shares authorized;
issued 3/96--12,346,288 shares;
9/95--12,062,560 shares.......................... 124 121
Class B (Non-voting and convertible):
15,000,000 shares authorized;
issued 3/96--12,846,041 shares;
9/95--12,969,050 shares.......................... 128 130
Class C (Non-voting and convertible):
2,000,000 shares authorized;
issued 3/96--279,439 shares;
9/95--440,158 shares............................. 3 4
Capital in excess of par value..................... 171,441 165,044
Retained earnings (deficit)........................ (275,853) (294,803)
Cost of common stock in treasury................... (6,220) (6,220)
---------- ---------
(110,377) (135,724)
---------- ---------
$1,083,132 $838,673
========== =========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
---------------------
1996 1995
---------- ----------
<S> <C> <C>
Revenues............................................... $1,362,056 $1,178,035
Cost of goods sold..................................... 1,283,898 1,112,397
---------- ----------
Gross Profit........................................... 78,158 65,638
Selling and administrative expenses.................... 48,907 38,536
Depreciation........................................... 1,968 1,736
---------- ----------
Operating income..................................... 27,283 25,366
Interest expense....................................... 9,870 14,666
---------- ----------
Income before taxes and extraordinary item............. 17,413 10,700
Taxes on income........................................ 7,313 4,027
---------- ----------
Income before extraordinary item....................... 10,100 6,673
Extraordinary charge-early retirement of debt, net of
income tax benefit.................................... -- (126)
---------- ----------
Net income........................................... $ 10,100 $ 6,547
========== ==========
Earnings per share (fully diluted):
Income before extraordinary item..................... $ .45 $ .45
Extraordinary item................................... -- --
---------- ----------
Net income......................................... $ .45 $ .45
========== ==========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED
MARCH 31,
---------------------
1996 1995
---------- ----------
<S> <C> <C>
Revenues............................................... $2,644,569 $2,307,131
Cost of goods sold..................................... 2,496,686 2,178,256
---------- ----------
Gross Profit........................................... 147,883 128,875
Selling and administrative expenses.................... 92,245 78,134
Depreciation........................................... 3,964 3,436
---------- ----------
Operating income..................................... 51,674 47,305
Interest expense....................................... 19,002 31,989
---------- ----------
Income before taxes and extraordinary item............. 32,672 15,316
Taxes on income........................................ 13,722 7,757
---------- ----------
Income before extraordinary item....................... 18,950 7,559
Extraordinary charge-early retirement of debt, net of
income tax benefit.................................... -- (11,875)
---------- ----------
Net income (loss).................................... $ 18,950 $ (4,316)
========== ==========
Earnings (loss) per share (fully diluted):
Income before extraordinary item..................... $ .84 $ .51
Extraordinary item................................... -- (.80)
---------- ----------
Net income (loss).................................. $ .84 $ (.29)
========== ==========
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED
MARCH 31
--------------------
1996 1995
-------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss)....................................... $ 18,950 $ (4,316)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation........................................... 3,964 3,436
Amortization........................................... 1,340 1,298
Provision for losses on accounts receivable............ 192 3,543
(Gain) loss on disposal of property and equipment...... (14) (35)
Deferred income taxes.................................. 5,724 (999)
Loss on early retirement of debt....................... 15,552
Changes in operating assets and liabilities:
Restricted cash....................................... 8,536 (38,098)
Accounts receivable................................... (204) (17,736)
Merchandise inventories............................... (153,828) (72,445)
Prepaid expenses...................................... (104) (503)
Accounts payable, accrued expenses and income taxes... 119,028 (23,362)
Debentures issued in lieu of payment of interest...... 8,101
Miscellaneous.......................................... 597 (911)
-------- ----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES.. 4,181 (126,475)
INVESTING ACTIVITIES
Capital expenditures.................................... (9,741) (5,998)
Proceeds from sales of property and equipment........... 465 1,694
Cost of company acquired................................ (28,329)
-------- ----------
NET CASH (USED IN) INVESTING ACTIVITIES.............. (37,605) (4,304)
FINANCING ACTIVITIES
Long-term debt borrowings............................... 806,060 1,053,905
Long-term debt repayments............................... (740,974) (914,578)
Deferred financing costs................................ (7,704)
Exercise of stock option................................ 114
Purchase of treasury stock.............................. (1,270)
-------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES............ 65,086 130,467
-------- ----------
Increase (decrease) in cash and cash equivalents......... 31,662 (312)
Cash and cash equivalents at beginning of period......... 32,171 25,311
-------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD............... $ 63,833 $ 24,999
======== ==========
</TABLE>
See notes to consolidated financial statements.
7
<PAGE>
AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--BASIS OF PRESENTATION
The accompanying financial statements present the consolidated financial
position, results of operations and cash flows of AmeriSource Health
Corporation, formerly AmeriSource Distribution Corporation, and its wholly-
owned subsidiaries (the "Company") as of the dates and for the periods
indicated. All material intercompany accounts and transactions have been
eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary to present
fairly the financial position as of March 31, 1996, the results of operations
for the three and six months ended March 31, 1996 and 1995 and the cash flows
for the six months ended March 31, 1996 and 1995 have been included. Certain
information and footnote disclosures normally included in financial statements
presented in accordance with generally accepted accounting principles, but
which are not required for interim reporting purposes, have been omitted. The
accompanying unaudited condensed consolidated financial statements should be
read in conjunction with the financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995.
The Company's income (loss) per share and share data in the financial
statements have been retroactively restated to reflect the effect of the 2.95-
for-1 stock split declared in connection with the public offering by the
Company of its Common Stock in April, 1995.
NOTE 2--LEGAL MATTERS AND CONTINGENCIES
In the ordinary course of its business, the Company becomes involved in
lawsuits, administrative proceedings and governmental investigations,
including antitrust, environmental, product liability and regulatory agency
and other matters. In some of these proceedings, plaintiffs may seek to
recover large and sometimes unspecified amounts and the matters may remain
unresolved for several years. On the basis of information furnished by counsel
and others, the Company does not believe that these matters, individually or
in the aggregate, will have a material adverse effect on its business or
financial condition.
The Company is subject to contingencies pursuant to environmental laws and
regulations at one of its former distribution centers that may require the
Company to take remediation efforts. In fiscal 1994, the Company accrued $4.1
million to cover future consulting, legal, and remediation and ongoing
monitoring costs. The accrued liability, which is reflected in other long-term
liabilities on the accompanying consolidated balance sheet ($3.9 million at
March 31, 1996), is based on an engineering analysis prepared by outside
consultants and represents an estimate of the extent of contamination and
choice of remedy, existing technology and presently enacted laws and
regulations. However, changes in remediation standards, improvements in
cleanup technology and discovery of additional information concerning the site
could affect the estimated liability in the future. The Company is
investigating the possibility of asserting claims against responsible parties
for recovery of these costs. Whether or not any recovery may be forthcoming is
unknown at this time, although the Company intends to vigorously enforce its
rights and remedies.
The Company has received notices from the Internal Revenue Service asserting
deficiencies in federal corporate income taxes for the Company's taxable years
1987 through 1991. The proposed adjustments indicate a net increase to taxable
income for these years of approximately $24 million and relate principally to
the deductibility of costs incurred with respect to the leveraged buyout
transaction which occurred in 1988. The Company has analyzed these matters
with tax counsel and believes it has meritorious defenses to the deficiencies
asserted by the Internal Revenue Service. The Company will contest the
asserted deficiencies through the administrative appeals process and, if
necessary, litigation.
8
<PAGE>
AMERISOURCE HEALTH CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
In November 1993, the Company, along with six other wholesale distributors
and twenty-four pharmaceutical manufacturers, were named as defendants in a
series of purported class action antitrust lawsuits alleging violations of
various antitrust laws associated with the chargeback pricing system. In
addition, the Company is a party to a parallel suit filed in state court in
Minnesota. Plaintiffs seek injunctive relief, treble damages, attorneys' fees,
and costs. In October 1994, the Company entered into a Judgement Sharing
Agreement with other wholesaler and pharmaceutical manufacturer defendants.
Under the Judgement Sharing Agreement (a) the manufacturer defendants agreed
to reimburse the wholesaler defendants for litigation costs incurred, up to an
aggregate of $9 million; and (b) if a judgement is entered into against both
manufacturers and wholesalers, the total exposure for joint and several
liability of the Company is limited to the lesser of 1% of such judgement or
$1 million. In addition, the Company has released any claims that it might
have had against the manufacturers for the claims presented by the plaintiffs
in these lawsuits. The Judgement Sharing Agreement covers the federal court
litigation as well as the cases which have been filed in various state courts.
On April 4, 1996, the federal court granted the wholesalers' motion for
summary judgment.
NOTE 3--EARNINGS PER SHARE
Earnings (loss) per share is computed on the basis of the weighted average
number of shares outstanding during the periods presented (22,170,686 and
14,780,238 for the three months ended March 31, 1996 and March 31, 1995,
respectively; and 22,170,686 and 14,764,953 for the six months ended March 31,
1996 and March 31, 1995, respectively) plus the dilutive effect of stock
options (339,707 and 333,035 for the three and six months ended March 31,
1996, respectively on a fully diluted basis). Share and per share amounts
prior to April 1995 have been adjusted for the 2.95-for-1 stock split effected
in conjunction with the Company's public offering.
NOTE 4--ACQUISITION
In February 1996, the Company acquired all of the stock of Gulf Distribution
Inc. in a cash transaction. Gulf Distribution Inc. is a Miami, Florida based
wholesale pharmaceutical distributor with annualized revenues of approximately
$180 million. The purchase price was $28.3 million and the transaction was
accounted for by the purchase method. The excess of the purchase price over
net assets acquired has been allocated to goodwill. Changes in purchase
accounting estimates may result in a reallocation of the purchase price within
one year of the acquisition.
NOTE 5--SUBSEQUENT EVENTS
In April 1996, the Company purchased and retired $26.7 million of its 11
1/4% Senior Debentures for 111% of the principal amount plus accrued interest
through the date of purchase (approximately $30.5 million) which resulted in
an extraordinary charge of $3.7 million (less a $1.6 million tax benefit)
relating to the market premium and related writeoff of unamortized financing
fees.
In April 1996, the Company filed a registration statement with respect to a
proposed public offering by the Company of up to 5,520,000 shares of Class A
common stock, including an over-allotment option of up to 720,000 shares. Of
the 5,520,000 shares to be offered, 1,500,000 shares are to be sold by the
Company and 4,020,000 shares are to be sold by certain stockholders of the
Company (the "Selling Stockholders"). The Company will not receive any of the
proceeds from the shares to be sold by the Selling Stockholders. The proceeds
from the 1,500,000 shares to be sold by the Company will be used to repay
long-term debt and for general corporate purposes.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Revenues for the three months ended March 31, 1996 increased 16% to $1.4
billion from $1.2 billion in fiscal 1995. For the six months ended March 31,
1996, revenues were $2.6 billion, an increase of $337.4 million or 15%
compared to the prior year. The year-to-year revenue gains reflect increases
across all customer groups and the impact of the Company's expansion into new
geographic markets, especially in the western and northeastern United States,
and price increases. Revenues of the Company's western region increased by 43%
in the first six months of fiscal 1996. The acquisitions of Newbro Drug
Company in July 1995 and Gulf Distribution Inc. in February 1996 accounted for
2% of the 15% increase in revenues for the first six months of fiscal 1996.
During the six months ended March 31, 1996, sales to hospitals increased 5%,
sales to independent drug store customers increased 24%, and sales to the
chain drug store customer group increased 21%, as compared with the prior
fiscal year. During the six months ended March 31, 1996 sales to hospitals
accounted for 43% of total revenues, while sales to independent drug stores
accounted for 37% and sales to chain drug stores 20% of the total.
Gross profit of $78.2 million in the second quarter of fiscal 1996 increased
by 19% over 1995 due to the increase in revenues and gross profit margin
expansion. As a percentage of revenues, the gross profit margin in the second
fiscal quarter of fiscal 1996 was 5.74% as compared to 5.57% in the prior
year. For the six months ended March 31, 1996, the gross profit margin
percentage of 5.59% was unchanged from the prior year. The increase in gross
profit margin percentage from the prior year second quarter was due to
increased sales of higher margin generic drugs, the continued introduction of
new marketing programs with manufacturers, the growth of higher margin
specialty businesses such as pharmaceutical repackaging, and an increase in
inventory investment buying activity, offset in part by a decline in selling
margin percentage due to continuing price competition throughout the industry.
Operating expenses increased by $10.6 million or 26%, in the second quarter
of fiscal 1996 compared with the prior year, and as a percentage of revenues,
were 3.74% in 1996 and 3.42% in 1995. For the first six months of fiscal 1996,
operating expenses increased 18% compared to the prior year and represented
3.64% of revenues versus 3.54% of revenues in the prior year. The increase as
a percentage of revenue in fiscal 1996 is primarily due to the cost of opening
new distribution facilities in Orlando, Florida, and Phoenix, Arizona,
integration costs related to Newbro Drug Company and Gulf Distribution, Inc.,
above average growth of the higher cost to service independent drug store
segment, and the cost of developing new value added marketing programs. These
costs have been offset in part by continued economies of scale at the
Company's established locations.
Operating income of $27.3 million in the second quarter of fiscal 1996
increased by 8% over the prior year. For the six months ended March 31, 1996
operating income increased by 9% compared to the prior year. As a percentage
of revenues, the Company's operating margin declined to 1.95% in fiscal 1996
from 2.05% in fiscal 1995 due to the increase in expenses discussed above. The
Company is evaluating its distribution network to identify opportunities for
increased efficiencies and cost reduction necessary to maintain and grow its
operating margin.
Interest expense of $9.9 million in the second quarter of fiscal 1996
represents a decrease of $4.8 million or 33% compared to the prior year
quarter. For the six month period ended March 31, 1996 interest expense
declined by $13.0 million or 41% versus the prior year six month period. The
decrease was due to the redemption, in January 1995 of the $166.1 million of
14 1/2% senior subordinated notes, the redemption, in May 1995, of $74.3
million of 11 1/4% senior debentures, and lower average borrowing rates due to
the implementation of the receivables securitization financing in December
1994 and reductions in the borrowing rates of the Company's revolving credit
facility which was amended in December 1994. Average borrowings during the
quarter ended March 31, 1996 were $522 million as compared to average
borrowings of $673 million in the prior year second quarter. For the six
months ended March 31, 1996, average borrowings were $486 million versus
average borrowings of $623 million in the prior year.
10
<PAGE>
The income tax provisions for the three and six months ended March 31, 1996
were computed based on an estimate of the full year effective tax rate. The
extraordinary charge in fiscal 1995 of $15.6 million, net of a tax benefit of
$3.7 million, relates to the amendment of the revolving credit facility and
the redemption of the 14 1/2% senior subordinated notes and the consequent
write-off of unamortized financing fees and redemption premiums paid in the
prior year.
LIQUIDITY AND CAPITAL RESOURCES
During the six-month period ended March 31, 1996, the Company's operating
activities generated $4.2 million in cash despite the increase of $153.8
million in merchandise inventories which was offset in part by the $119.0
million increase in accounts payable and reflects the Company's growth as well
as increased purchases in anticipation of manufacturer price increases and
other deal buying opportunities. A portion of the increase in inventories
during the six month period was also due to the opening of the Phoenix,
Arizona and Orlando, Florida distribution facilities. Operating cash uses
during the six month period ended March 31, 1996 included $18.5 million in
interest payments and $4.3 million in income tax payments.
Capital expenditures for the six months ended March 31, 1996 were $9.7
million and are primarily equipment purchases related to the expansion of the
Company's pharmaceutical repackaging operation, the opening of the Orlando,
Florida and Phoenix, Arizona distribution centers, and additional investments
in information technology. Investments in information technology and warehouse
improvements are expected to continue throughout the year, and total capital
expenditures are expected to be $15 million for the fiscal year.
In February 1996, the Company purchased all of the stock of Gulf
Distribution Inc. in a cash transaction. The transaction was funded by
borrowings under the revolving credit facility. Gulf Distribution Inc. is a
Miami, Florida-based wholesaler with annualized revenues of approximately $180
million. The purchase price was $28.3 million.
Cash provided by financing activities during the first six months of fiscal
1996 represents borrowings under the Company's revolving credit facility and
its receivable securitization financing primarily to fund its working capital
requirements. As a result of the Company's initial public offering in April
1995 and its financial results, the borrowing rate alternatives under the
revolving credit facility were reduced by 1.0% to LIBOR plus 1.25% and the
prime rate plus zero beginning in October 1995. At March 31, 1996, borrowings
under the Company's $380 million revolving credit facility were $215 million
(at an average interest rate of 6.9%) and borrowings under the $285 million
Receivables Program were $210 million (at an average interest rate of 5.8%).
An increase in interest rates would adversely affect the Company's operating
results and the cash flow available after debt service to fund operations and
expansion and, if permitted to do so under its revolving credit facility, to
pay dividends on its capital stock.
The Company's operating results have generated sufficient cash flow which,
together with borrowings under its debt agreements and credit terms from
suppliers, have provided sufficient capital resources to finance working
capital and cash operating requirements, fund capital expenditures, and
interest currently payable on outstanding debt. The Company's primary ongoing
cash requirements will be to fund payment of interest on indebtedness, finance
working capital, and fund capital expenditures and routine growth and
expansion through new business opportunities. Future cash flows from
operations and borrowings are expected to be sufficient to fund the Company's
ongoing cash requirements.
In April 1996, the Company filed a registration statement with the SEC to
sell approximately 5.5 million shares of its common stock, including an over-
allotment option of 0.7 million shares, via a public offering. Of the 5.5
million shares to be offered, 1.5 million shares are to be sold by the Company
and 4.0 million shares are to be sold by certain stockholders of the Company
(the "Selling Stockholders"). The Company will not receive any of the proceeds
from the shares to be sold by the Selling Stockholders. If successful, the
proceeds from the 1.5 million shares to be sold by the Company will be used to
repay long-term debt and for general corporate purposes.
11
<PAGE>
In April 1996, the Company purchased and retired $26.7 million of its 11
1/4% Senior Debentures for 111% of the principal amount plus accrued interest
through the date of purchase (approximately $30.5 million) which resulted in
an extraordinary charge of $3.7 million (less a $1.6 million tax benefit)
relating to the market premium on the redemption and related writeoff of
unamortized financing fees.
The Company is subject to certain contingencies pursuant to environmental
laws and regulations at one of its former distribution centers that may
require remediation efforts. In fiscal 1994, the Company accrued a liability
of $4.1 million to cover future consulting, legal and remediation, and ongoing
monitoring costs. The accrued liability, which is reflected in other long-term
liabilities on the accompanying consolidated balance sheet, is based on an
estimate of the extent of contamination and choice or remedy, existing
technology, and presently enacted laws and regulation, however, changes in
remediation standards, improvements in cleanup technology, and discovery of
additional information concerning the site could affect the estimated
liability in the future. The Company is investigating the possibility of
asserting claims against responsible parties for recovery of these costs.
Whether or not any recovery may be forthcoming is unknown at this time.
12
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On February 28, 1996, the Company held its annual meeting of stockholders,
at which the following were reelected as directors of the Company to hold
office until the next annual meeting of stockholders and until their
successors have been elected and qualified: John F. McNamara, Bruce C.
Bruckmann, Michael A. Delaney, Richard C. Gozon, Lawrence C. Karlson, George
H. Strong, James A. Urry and Barton J. Winokur.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit Number 27 Financial Data Schedule
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the
quarter ended March 31, 1996.
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
Amerisource Health Corporation
/s/ Kurt J. Hilzinger
_____________________________________
KURT J. HILZINGER
VICE PRESIDENT, CHIEF FINANCIAL
OFFICER AND TREASURER (PRINCIPAL
FINANCIAL AND ACCOUNTING OFFICER)
Date: April 29, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERISOURCE
HEALTH CORP. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 69,935
<SECURITIES> 0
<RECEIVABLES> 340,272
<ALLOWANCES> 13,548
<INVENTORY> 590,675
<CURRENT-ASSETS> 1,004,596
<PP&E> 85,985
<DEPRECIATION> 35,432
<TOTAL-ASSETS> 1,083,132
<CURRENT-LIABILITIES> 685,141
<BONDS> 500,850
0
0
<COMMON> 255
<OTHER-SE> (110,632)
<TOTAL-LIABILITY-AND-EQUITY> 1,083,132
<SALES> 2,644,569
<TOTAL-REVENUES> 2,644,569
<CGS> 2,496,686
<TOTAL-COSTS> 2,496,686
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 192
<INTEREST-EXPENSE> 19,002
<INCOME-PRETAX> 32,672
<INCOME-TAX> 13,722
<INCOME-CONTINUING> 18,950
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,950
<EPS-PRIMARY> .84
<EPS-DILUTED> .84
</TABLE>
