IRVING, Texas
,
February 3, 2022
(press release)
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Third-Quarter Highlights, Year-over-Year: Fiscal 2022 Outlook: Excluding the impacts of the above items from both fiscal 2022 guidance and fiscal 2021 results indicate 27% to 33% forecasted growth compared to prior year. McKesson Corporation (NYSE:MCK) today reported third-quarter results for the period ended December 31, 2021. Fiscal 2022 Third-Quarter Result Summary "Our dedicated team members delivered another quarter of strong financial results, demonstrating our continued focus on our strategic growth initiatives, company priorities, and value creation for all stakeholders," said Brian Tyler, chief executive officer. "As a result of our underlying business performance across all segments, and our ongoing support of the COVID-19 response efforts, we are raising our previous guidance range for fiscal 2022 Adjusted Earnings per Diluted Share to $23.55 to $23.95." Third-quarter revenues were $68.6 billion, an increase of 10% from a year ago, primarily driven by growth in the U.S. Pharmaceutical segment, largely due to higher volumes from retail national account customers and market growth, partially offset by branded to generic conversions. Third-quarter loss per diluted share from continuing operations of ($0.04) included an after-tax charge of $829 million for the fair value remeasurement related to McKesson’s previously announced agreement to sell the retail and distribution businesses in the United Kingdom. Third-quarter Adjusted Earnings per Diluted Share did not include these charges. Third-quarter fiscal year 2021 loss per diluted share of ($39.03) included a pre-tax $8.1 billion expense accrual related to the opioid litigation. Third-quarter Adjusted Earnings per Diluted Share was $6.15 compared to $4.60 a year ago, an increase of 34%, driven by strong operating performance across the segments, the contribution from COVID-19 vaccine distribution, kitting and storage programs with the U.S. government, and a lower share count. For the first nine months of the fiscal year, McKesson returned $2.2 billion of cash to shareholders, which included $2.0 billion of common stock repurchases and $206 million of dividend payments. During the first nine months of the fiscal year, McKesson generated cash from operations of $1.5 billion, and invested $380 million in capital expenditures, resulting in Free Cash Flow of $1.2 billion. Business Highlights U.S. Pharmaceutical Segment Prescription Technology Solutions Segment Medical-Surgical Solutions Segment International Segment Company Updates Fiscal 2022 Outlook McKesson raised fiscal 2022 Adjusted Earnings per Diluted Share guidance to $23.55 to $23.95 from the previous range of $22.35 to $22.95 to reflect strong operating performance and increased contribution from the U.S. government's COVID-19 vaccine distribution, kitting, and storage programs. Fiscal 2022 Adjusted Earnings per Diluted Share guidance includes approximately $2.99 to $3.59 of impacts attributable to the following: Excluding the impacts of the above items from both fiscal 2022 guidance and fiscal 2021 results indicate 27% to 33% forecasted growth compared to prior year. Additional modeling considerations will be provided in the earnings call presentation. Conference Call Details McKesson has scheduled a conference call for today, Wednesday, February 2nd at 4:30 PM ET to discuss the company’s financial results. The audio webcast of the conference call will be available live and archived on McKesson's Investor Relations website at investor.mckesson.com. Upcoming Investor Events McKesson management will be participating in the following investor conferences: Audio webcast, and a complete listing of upcoming events for the investment community, including details and updates, will be available on McKesson's Investor Relations website. Non-GAAP Financial Measures GAAP refers to the U.S. generally accepted accounting principles. This press release includes GAAP financial measures as well as Non-GAAP financial measures, including Adjusted Gross Profit, Adjusted Operating Expenses, Adjusted Other Income, Adjusted Loss on Debt Extinguishment, Adjusted Income Tax Expense, Adjusted Earnings, Adjusted Earnings per Diluted Share, Adjusted Segment Operating Profit, Adjusted Segment Operating Profit Margin, Adjusted Corporate Expenses, Adjusted Operating Profit, FX-Adjusted results and Free Cash Flow which are financial measures not calculated in accordance with GAAP. Refer to the “Supplemental Non-GAAP Financial Information” section of the accompanying financial statement tables for the definitions and usefulness of the Company’s Non-GAAP financial measures and the attached schedules for reconciliations of the differences between the Non-GAAP financial measures and their most directly comparable GAAP financial measures. The Company does not provide forward-looking guidance on a GAAP basis as McKesson is unable to provide a quantitative reconciliation of this forward-looking Non-GAAP measure to the most directly comparable forward-looking GAAP measure, without unreasonable effort, because McKesson cannot reliably forecast LIFO inventory-related adjustments, certain litigation loss and gain contingencies, restructuring, impairment and related charges, and other adjustments, which are difficult to predict and estimate. These items are inherently uncertain and depend on various factors, many of which are beyond the company’s control, and as such, any associated estimate and its impact on GAAP performance could vary materially. Cautionary Statements This earnings release contains 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. Forward-looking statements may be identified by their use of terminology such as “believes”, “expects”, “anticipates”, “may”, “will”, “should”, “seeks”, “approximately”, “intends”, “projects,” “plans”, “estimates” or the negative of these words or other comparable terminology. The discussion of financial outlook, trends, strategy, plans, assumptions, or intentions may also include forward-looking statements. Readers should not place undue reliance on forward-looking statements, such as financial performance forecasts, which speak only as of the date they are first made. Except to the extent required by law, we undertake no obligation to update or revise our forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, or implied. Although it is not possible to predict or identify all such risks and uncertainties, we encourage investors to read the risk factors described in our most recent annual and periodic report filed with the Securities and Exchange Commission. These risk factors include, but are not limited to: we experience costly and disruptive legal disputes and settlements, including regarding our role in distributing controlled substances such as opioids; we might experience losses not covered by insurance; we might be adversely impacted by changes in tax legislation or challenges to our tax positions; we from time to time record significant charges from impairment to goodwill, intangibles, inventory and other assets or investments; we experience cybersecurity incidents and might experience significant computer system compromises or data breaches; we might experience significant problems with information systems or networks; we may be unsuccessful in retail pharmacy profitability; we might be harmed by large customer purchase reductions, payment defaults or contract non-renewal; our contracts with government entities involve future funding and compliance risks; we might be harmed by changes in our relationships or contracts with suppliers; we might be adversely impacted by delays or other difficulties with divestitures; we might be adversely impacted by healthcare reform such as changes in pricing and reimbursement models; we might be adversely impacted by changes or disruptions in product supply and we have experienced and may experience difficulties in sourcing products and changes in pricing due to the effects of the COVID-19 pandemic on supply chains; we might be adversely impacted as a result of our distribution of generic pharmaceuticals; we might be adversely impacted by an economic slowdown (including the effects we have experienced from the COVID-19 pandemic) or recession and by disruption in capital and credit markets that might impede our access to credit, increase our borrowing costs and impair the financial soundness of our customers and suppliers; we might be adversely impacted by fluctuations in foreign currency exchange rates; we might be adversely impacted by events outside of our control, such as widespread public health issues (including the effects we have experienced from the COVID-19 pandemic), natural disasters, political events and other catastrophic events; we may be adversely affected by global climate change or by legal, regulatory or market responses to such change; and we face uncertainties and risks related to COVID-19 vaccination mandates and to vaccination distribution and related ancillary supply kit programs. About McKesson Corporation McKesson Corporation is a global leader in healthcare supply chain management solutions, retail pharmacy, community oncology and specialty care, and healthcare information solutions. 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 a “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. Tables and full-text of earnings release also available for viewing and download in PDF format: McKesson Reports Fiscal 2022 Third-Quarter Results (PDF, 326 KB) PR Contact David Matthews
Rachel Rodriguez
Investors
469-260-0556
Rachel.Rodriguez@McKesson.com
Media
214-952-0833
David.Matthews@McKesson.com
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