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AmerisourceBergen Corp  (NYSE:ABC)
Q4 2018 Earnings Conference Call
Nov. 06, 2018, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by and welcome to the ABC Earnings Conference Call. At this time, all phone lines are in a listen-only mode. Later, we will conduct a question-and-answer session with instructions given to you at that time. (Operator Instructions) As a reminder, today's conference call is being recorded.

I'll now turn the conference over to your opening speaker for today, Bennett Murphy. Please go ahead.

Bennett Murphy -- Vice President, Investor Relations

Thank you. Good morning and thank you all for joining us for this conference call to discuss the AmerisourceBergen Fiscal 2018 fourth quarter financial results. I am Bennett Murphy, Vice President, Investor Relations for AmerisourceBergen, and joining me today are Steve Collis, Chairman, President and CEO; Tim Guttman, the Executive Vice President and CFO; and Jim Cleary, the Executive Vice President and Incoming CFO.

On today's call, we will be discussing non-GAAP financial measures, which we use to assess the underlying performance of our business. The GAAP to non-GAAP reconciliations provided in today's press release are also available on our website.

During this conference call, we will also make forward-looking statements about our business and financial expectations on an adjusted non-GAAP basis including, but not limited to earning per share, operating income and income taxes. Forward-looking statements are based on management's current expectations and are subject to uncertainty and change. AmerisourceBergen assumes no obligation to update any forward-looking statements or information. And this call cannot be rebroadcast without the expressed permission of the company. We remind you that there are uncertainties and risks that could cause our future actual results to differ materially from our current expectations. For a discussion of key risk factors and other cautionary statements and assumptions, we refer you to our SEC filings including our most recent Form 10-K and to today's press release.

I would like to remind you that we have posted a slide presentation to accompany this morning's press release. You can find it at our website, investor.amerisourcebergen.com. You'll have an opportunity to ask questions after today's remarks by management. We do ask that you limit your questions to one per participant in order to get us to as many participants and inquiries as we can within the hour.

With that, I will turn the call over to Steve. Steve?

Steve Collis -- Chairman, President and Chief Executive Officer

Thank you, Bennett, and good morning to everyone on today's call. We will be updating you on our performance for the year and briefly discussing our fourth quarter and full fiscal year results. Additionally, I will spend some time addressing the current market environment AmerisourceBergen's positioning and our expectations for fiscal 2019.

Throughout fiscal 2018, our associates executed to deliver solid performance even as two of our business units continued to work through some challenges. I am proud of what we've accomplished in this dynamic market and want to take a moment to thank our team of 21,000 associates for their dedication and performance. We've got talented teams across the globe, who help shape our culture, power our ability to execute and drive our growth.

Over the past year, we have had several notable achievements. First, we successfully executed a number of key strategic initiatives that further strengthened and expanded our relationships with key customers. Our team helped to enable this unit integration of more than 1,900 Rite Aid stores, acquired by our largest partner Walgreens. We also continue to grow share of work within our existing customer base and successfully renew the key customer contracts including with a key partner Humana, and several others, all without creating any margin headwinds.

Next, our continued leadership and performance in specialty distribution remain a key area of strength for AmerisourceBergen. This quarter marked the 19th consecutive period with 10% or greater revenue growth for our specialty distribution businesses and the first time surpassing 10 billion in quarterly revenue. We are proud of both this achievement and the ability of our teams to put our customers first, ensuring that patients have access to bio-pharmaceuticals whenever and wherever they need them.

Also our Global Commercialization Services and Animal Health business group including businesses, like World Courier and Xcenda delivered results above expectations and surprised manufacture, innovation across the globe, with best in class, global specialty logistics and market access services. These efforts across AmerisourceBergen helped to deliver strong results. Revenues were up 11% to $43 billion for the quarter and 10% to $168 billion for the full year. We delivered adjusted diluted EPS of $1.45 for the fourth quarter and $6.49 for the full year, an increase of 9% and 10% respectively compared to the previous fiscal year periods.

Next, I will provide update on two business units that have dealt with challenges in fiscal 2018. We are pleased with the substantial progress we have made at Lash group. As the business continues to migrate customers to Fusion, our game-changing technology platform and manufacturer feedback continues to be very positive. In a growing market of new innovative specialty therapies that require additional patient access and adherence services, we believe, Lash's focused services enabled by Fusion are a significant differentiator, that is positioning Lash's future success.

Now for an update on PharMEDium. As always, patient safety comes first, and we continue to communicate with the FDA to ensure they are satisfied that our Memphis facility meets 503B status, prior to commencing commercial distribution. We have made significant progress in Memphis, however work remains to be done. The properties have certainly taken longer than we expected, however that is the right approach to take and we have backed an appropriate as -- for PharMEDium in the fiscal 2019 guidance.

Despite the challenges, we believe the long-term outlook for PharMEDium's business and industry demand remain unchanged. In fact, PharMEDium had secured the primary award status for a large health system GPO, reflecting the market's appreciation for the work we do, and the products that we create. We have taken significant measures to ensure that the long-term outcome from this process will be enhanced quality assurance and quality control program that deliver the safest and highest quality products for our customers.

As we close our review of fiscal 2018, I wanted to discuss our financial leadership transition. As you all know, back in September, we announced that CFO , Tim Guttman, had decided to retire from the company and that Jim Cleary, our current Group President, Global Commercialization Services and Animal Health will succeed Tim as Executive Vice President and Chief Financial Officer. Throughout his 16 years in the company and nearly seven years tenure as CFO, Tim has been a key partner to me and the rest of the executive leadership team. He has supported the company delivering a strong track record of financial results, growth and total shareholder return, all the while he has exemplified by financial stewardship and humble leadership. Please join AmerisourceBergen team and me as we wish the best to our colleague and friend, Tim Guttman.

Now I will turn the call over to Tim for a more in-depth review of our forth quarter financial results.

Tim Guttman -- Executive Vice President and Chief Financial Officer

Thanks, Steve and I really appreciate your kind words. This morning, consist with past quarters, my remarks will focus only at our non-GAAP adjusted financial results. For a discussion of our GAAP results, I would ask that you please refer to our earnings release. I also want to remind everyone that we are consolidating the adjusted financial results of our Brazil investment, Profarma and the specialty joint venture. We had just anniversaried these consolidations and as a result, they had some complexity when reviewing our numbers and comparisons. We continue to include the schedule in our earnings release, which illustrates the financial impact of the consolidation.

As Steve mentioned, we are pleased with our fourth quarter performance and importantly, we exited fiscal '18 on a strong footing. Excluding the financial headwind from PharMEDium, our business business portfolio executed well. We grew our volumes across the enterprise and we had solid financial results. In the second half of our fiscal '18, we reported just under $3 in adjusted EPS, delivering on the guidance we provided on our March quarterly earnings call. With that, we can begin our detailed financial review. I will provide commentary in two main areas. First, I will discuss our September Q4 consolidated and segment performance. And second, I will provide a few brief comments on full-year fiscal '18 performance.

We finished the quarter with adjusted diluted EPS at $1.45, an increase of 9%. Let me highlight that Brazil was neutral to our adjusted earnings this quarter. We did lose a few pennies of EPS from two items that I will cover shortly, that were one-time expenses, specific to the Pharmaceutical Distribution & Services segment. Our consolidated revenues were $43.3 billion, up 11%. The growth rate was a solid 10%, ex the impact from Brazil. Gross profit increased 6% or $68 million to about $1.2 billion. However, when excluding the impact from Brazil, our gross profit would have increased 1%. Our Pharmaceutical Distribution & Services segment contributed most of this increase despite the headwind from PharMEDium.

Let me highlight our gross profit growth ex-Brazil, would have been closer to 2%, if not for a one-time inventory expense due to damaged non-returnable pharmaceutical products at one of our distribution centers. Operating expenses increased 17% or $106 million to $732 million. We had several moving parts within OpEx that caused the large increase.

Let me spend a minute working through these items to normalize the growth rate. Brazil contributed just under half of the OpEx dollar increase and drove 8% in our OpEx growth. Additionally, Pharmaceutical Distribution's acquisition of HD Smith earlier this fiscal year drove roughly 5% of the OpEx growth. Consequently, our comparable year-over-year OpEx growth rate ex-Brazil and also ex-HD Smith would have been a very good 4%. Let me also point out this 4% growth rate included a compensation item related a year-end 401(k) discretionary match we have elected to make.

Operating income. Our adjusted operating income was $432 million, down about 8% from last year. And on a comparative basis, so, ex-Brazil, we would have been down roughly 9%. As a reminder, on our call last quarter, we specifically discussed the expected PharMEDium headwind in our Pharmaceutical Distribution segment for this September quarter, since the business had a very good Q4 last year. We will cover PharMEDium in more detail in the segment section. Overall, Steve and I both mentioned that we were pleased with our execution this quarter because ex Brazil and PharMEDium and a few expense items specific to the current September quarter, our operating income growth rate for ABC consolidated as well as our Pharmaceutical Distribution segment would have been in the mid-single digit range.

Moving below the operating income line. Interest expense net increased by about $8 million. Ex Brazil, the net increase was $5 million due primarily to debt issued earlier in the year to fund HD Smith acquisition. Income taxes, our adjusted income tax rate was just about 20%, and reflects the positive impact from tax reform and the new lower US corporate income tax rate. Additionally, we completed the year with a higher international income mix than we had forecasted due to the strong performance by World Courier, and a lower contribution from PharMEDium. This change in income mix had a positive effect on our tax rate. Our adjusted net income after backing out the Brazil non-controlling interest was $315 million, an increase of 7%, driven mostly by our lower tax rate and corresponding tax expense.

This concludes the review of our consolidated results. Next, I will cover our segment results. We can begin with pharmaceutical distribution services. Total segment revenues were nearly $42 billion, up 11%. The growth rate would have been 10% ex-Profarma Brazil. The 10% growth rate is mostly due to on-boarding new business from our strategic partner Walgreens, growth in our specialty distribution business in the high teens as a percentage and integrating HD Smith.

Moving to segment operating income. We had a decrease of about 11% to $357 million, the growth rate ex-Profarma Brazil was 1% lower at negative 12%. The segment was impacted by lower performance at our PharMEDium business. Ongoing remediation efforts at PharMEDium' Memphis facility caused a significant decline in year-over-year unit shift. We also had lower unit shifts from our open PharMEDium facility as they implemented enhanced quality procedures and testing. On the surface, the segment operating income results don't probably reflect the solid underlying business performance, we had better than expected growth from our key customer groups led by higher volumes, especially in generics and oncology drugs. Margins were in line with what we expected and overall, we managed our expenses well. It's worth saying one more time, the segment would have had a mid single-digit operating income growth rate after factoring in the items I've highlighted earlier when discussing ABC's consolidated results.

Before I leave the Pharmaceutical Distribution segment, I want to point out that this is the first quarter that we recorded an estimated expense related to the New York State Opioid Stewardship Act. This expense has been excluded from our adjusted results because the expense is not expected to be recurring. Recently, we changed our operating business model in terms of how we receive opioid prescription drug inventory in our New York distribution centers. This change essentially eliminates our New York opioid tax liability going forward.

We can now move to the other things, businesses that focus on global commercialization services and animal health, which includes World Courier, AmerisourceBergen Consulting and MWI. As a reminder, we consolidate our Brazil specially joint venture in this segment. In the quarter, total segment revenues were $1.6 billion, up 8%. When excluding the Brazil specialty JV, revenues grew 3% led by our Canadian operations and to a lesser extent, World Courier and MWI. From an operating income standpoint with Brazil, the segment increased 5% or $4 million to $75 million. The segment ex Brazil increased 3%. We are especially pleased with this result, as this was the first quarter in fiscal '18 that the segment had year-over-year growth. MWI led the way while World Courier and our Xcenda businesses also contributed. These three businesses offset the headwinds from our last consulting business.

Let me spend a minute on Lash Consulting. We continue to be encouraged by their progress. During the quarter, Lash added another key manufacturer, partnered to Fusion. This transition of Fusion was the most efficient to date and we received high satisfaction marks from our partner. We are also pleased with the momentum at Lash with new business wins, due in part to manufacturers being keenly interested in Fusion and the systems' capabilities and assets. Looking forward, Lash is positioned well entering a period with positive outsourcing and market trends. Wrapping up the other segment, we are executing well and very optimistic about this group of market-leading businesses and their prospects.

This completes our segment review. I would now like to cover a few full-year fiscal '18 consolidated financial items. To make this review more efficient my comments and comparisons will exclude Brazil. Revenue, our full-year growth was a solid 9%. Our specially distribution business had an outstanding year, finishing with the revenue growth percentage in the mid teens. When excluding the impact from HD Smith and new business from our Walgreens relationship, specifically that we acquired Rite Aid Pharmacy and PharMerica, our normalized revenue growth would have been just over 5%. Overall, we are pleased with this normalized growth rate as we continue to track above market as a result of our leading customer portfolio and best-in-class specially business. Our adjusted operating income for the year was down about 2%. We would have been closer to flat for the year ex the items that negatively impacted us in our September quarter. And importantly, our operating income growth rate ex-PharMEDium would have been in the mid single digits. EPS, our full year adjusted diluted EPS was $6.49, up 10% primarily due to tax reform, other tax initiatives and solid execution in the Pharmaceutical Distribution segment, helping to offset the headwind from PharMEDium.

Adjusted free cash flow, as a reminder, our adjusted free cash flow excludes the litigation payment we made in late September, which we reserved in fiscal '17. We had an exceptionally strong cash flow synergy in fiscal ' 18, resulting in adjusted free cash flow of $1.7 billion just above the guidance range we provided earlier in the year and more importantly, about 120% of our adjusted net income. We ended the fiscal year with $2.5 billion in total cash of which $800 million was held offshore. During the quarter, we did elect to repatriate approximately $640 million from our international operations and we used this cash for general corporate purposes. Going forward, we expect to repatriate international cash on an annual basis, primarily from our Switzerland business subject to applicable tax laws.

Our full-year fiscal '18 total share repurchases were $639 million. This translated to repurchasing about 3.5% of our share count. We continue to repurchase shares in October, roughly $125 million to complete our share authorization. As I wrap up this section, our commitment to returning capital to our shareholders is clear. During the last five years, we've returned about $4 billion between regular share repurchases and dividends.

The last topic I want to cover for fiscal '18 is manufacturer drug pricing. First, brand drug pricing. If you remember at the halfway point in our fiscal year, we had an average brand price increase of about 8%. With the slowdown in price increases during the second half of our fiscal year, we ended right in the middle of our 6% to 7% guidance range. Now moving to generics and specifically to deflation rate. As a reminder, our range was a negative 7% to negative 9% calculated using our busy side acquisition costs for generics. We ended the fiscal year just slightly higher than the negative 7%.

Let me point out, the deflation rate has remained relatively stable the last several months, and has improved versus what we experienced last year. Stabilization is hopefully at the last phase before easing generic deflation. As we have said in the past, the lower the deflation rate, the easier the annual hurdle is to overcome. Each percentage improvement on how much generics are deflating is meaningful. The stabilization is a clear positive and something that makes us optimistic looking into the future for generic pricing. This completes our fiscal '18 review.

Before I turn the call back to Steve, let me make a few personal remarks. As I quickly approach my retirement date from ABC, I want to take a moment to acknowledge several groups of people. First to my ABC finance and accounting team, certainly best-in-class. Thank you for your dedication, expertise and support you have provided to me throughout my time as CFO. To Steve, our executive leadership team, the terrific ABC associates and of course, our Board, thank you for your partnership and commitment for enhancing patient access to pharmaceuticals and growing ABC together.

And last but certainly not least, thank you to the sell-side and buy-side. I've enjoyed getting to know everyone and having conversations, many times passionate about ABC's differentiated positioning and the incredible value our industry delivers everyday. I'm honored and pleased to be handing the CFO range to Jim, a seasoned and accomplished executive, will help lead the company to new higher levels.

With that, I will turn the call back to Steve to discuss fiscal '19.

Steve Collis -- Chairman, President and Chief Executive Officer

Thank you, Tim. Looking to fiscal 2019 and beyond AmerisourceBergen will continue to invest, innovate, execute and grow. Even with challenges from PharMEDium, we expect our fiscal 2019 adjusted EPS to be in the range of $6.65 to $6.95, representing mid single-digit percentage growth. Our pharmaceutical-centric focus, unique portfolio of customers and businesses, differentiated customer experience and leadership in specialty, position AmerisourceBergen for long-term growth and shareholder value creation. While there may be periods of uncertainty within the broader marketplace, we are confident in our ability to execute, even as the company navigate through, while continues to be an ever evolving healthcare landscape.

Healthcare remains a critical integral part of the economy and pharmaceuticals represent the most efficient form of patient care. They not only improve patient lives but also key to mitigating overall healthcare spend. Right now, many debates regarding the US healthcare system are taking place at a headline level, with the cost of care and the price of prescription drugstores in focus. We realized that the healthcare system will continue to evolve, it also recognized that significant changes will lightly take up.

In this dynamic environment the scale and scope of AmerisourceBergen's value to its partners and our industry's value to the healthcare system overall, continue to be undeniable,. Our unique ability to provide logistical services and drive cost efficiency, limit supply chain are vital to patient access and care. As changes to various part of the current healthcare model are considered, we'll have an important seat at the table during discussions of policy leaders, manufacturers, customers and other stakeholders to help ensure that changes do not negatively affect patient access to the best care possible and that our important role in supply chain continues to be recognized. We believe every change offers opportunity and our overall focus on innovation and efficiency is key to ensuring that any model evolutions reflect the value we provide.

This morning's announcement of the Board approval of our new $1 billion share repurchase authorization, reinforces our confidence in our value proposition and ability to successfully navigate the industry evolution and reflects our ongoing commitment to return capital to our shareholders. We will continue to focus on elements we can control, be an advocate for community based providers, servicing our customer relationships, executing our differentiated strategy and investing in our businesses. AmerisourceBergen's position to continue delivering long-term sustainable growth and entirely differentiated in four key areas.

First, AmerisourceBergen's key long-term anchor partnerships in each statements; our alignment with these long-term relationships expand our ability to create more value for all of our partners and position us for share growth and success. We are extremely proud with the position we are in with our customers, with no major contract renewals on the horizon. Manufacturers are a key customer segment, to understand the value they capture in driving patient access to products through strategic partnerships with AmerisourceBergen.

As a vital connection between pharmaceutical manufacturers and healthcare providers, AmerisourceBergen continues to enhance our value proposition to manufacturers, with services, data and analytics that deliver additional value by helping manufacturers maximize patient access through therapy. On the other end of the supply chain, AmerisourceBergen continues to support the viability and growth of community-based providers, including independent pharmacies, specialty practices, such as community oncology and veterinary practices. Consumers seek care in their local community whether it's a hospital or a clinic or a pharmacy and accessibility of these healthcare professionals is vital. We want to make sure that we're enabling the local healthcare distinctions to best serve the people and animals in their communities, providing access to expertise in medicine when and where patients need it. AmerisourceBergen will continue its unwavering commitment to supporting community-based providers, enabling to use their time to focus on patient care and enhancing their ability to maximize business performance.

Second, our leadership position in specialty. The fastest growing part of the pharmaceutical market places AmerisourceBergen at the forefront of successful commercialization and distribution of specialty products. Over the last several decades, we have made many strategic organic and inorganic investments, owing on our comprehensive portfolio of global commercialization and distribution services that support enhanced access for the increasing number of new innovative therapies coming to market. We continue to have the most extensive footprint in specialty, leveraging our strengthened scale to serve the key connections between manufacturers and physicians and ultimately, patients.

The growth of complex specialty medications is also driving an increased demand for commercialization services. AmerisourceBergen continues to be well positioned to meet this growing need by having made ourselves the essential partner for manufacturers throughout the pharmaceutical commercialization process. As a differentiated partner with market-leading data and technology platforms and solutions, we are improving efficiency, driving data connectivity, generating insights and enabling manufacturers to enhance outcomes for patients and businesses.

Third, innovation is fundamental at AmerisourceBergen. Our differentiated portfolio of services and solutions unlocks new value for manufacturers and provider customers. Our highly automated distribution network and key IT systems, enable the successful navigation of a complex supply chain, while maintaining product safety and security. We remain committed to delivering a best-in-class customer experience through the design of new solutions that to transform the customers' experience to become more integrated, seamless, personalized and informative, empowering providers to spend more time on patient care.

For example, our ABC Order technology, designed by pharmacists for pharmacists continues to help providers operate more effectively and efficiently, giving us differentiated value and high customer satisfaction scores. We recently expanded and launched ABC Order to support our health systems customers, helping them improve inventory control efficiency, optimize ordering decisions and access data trend and insights.

Finally, AmerisourceBergen has a proven track record of successful financial stewardship. Our company continues to have a strong balance sheet and a thoughtful and disciplined approach to capital deployment, that includes investments to drive organic growth. The valuation consideration of value-creating strategic M&A opportunities, share repurchases and a reasonable dividend for our shareholders. This October, we completed our previous share repurchase authorization, following the execution of opportunistic repurchases. This morning's share repurchase authorization announcement and increase in our dividend reflects our balanced approach to capital deployment and ongoing commitment to returning shareholder capital.

In closing, I feel fortunate that in this financial leadership transition, we are able to have such an experienced executive as Jim taking on the role of CFO of AmerisourceBergen. Jim brings more than 20 years of strong leadership and operational experience and in-depth knowledge of our business to this new role. His proven track record of management and execution makes him an excellent leader to help AmerisourceBergen continue to grow as a leading healthcare solutions provider and drive shareholder return. Over the last several years, working with Jim, I have come to know him well, personally and professionally and respect and value his leadership experience, dedication to our associates, and as many of you in th e investment community already know, his commitment in delivering value to shareholders.

Now, I'll turn the call over to Jim who will discuss our financial guidelines for fiscal 2019, Jim?

James Cleary -- Executive Vice President and Group President, Global Commercialization Services & Animal Health

Thanks, Steve and good morning, everyone. Before I start my commentary on our fiscal 2019 guidance, I want to take a moment to thank Tim, not only for his support during this transition process, but also for having developed such a deep talented financial team to support me and my new role as CFO. I certainly have big shoes to fill and appreciate Tim's guidance throughout this process.

During my time as CEO of MWI Veterinary Supply, I valued my engagement with the investments community and I look forward to working with all of you now as CFO of AmerisourceBergen. Throughout my time here at AmerisourceBergen, most recently leading our global commercialization services and animal health group, I've gone to work with so many great associates, understand in detail the complex services and solutions we provide our partners and fully appreciate our incredible value proposition for our manufacturer and provider partners.

Now turning to some of our working assumptions that are factored into our fiscal 2019 expectations. First brand pricing. We assumes that brand inflation will be in the mid single digit. We believe this range is within reason, based on historical pricing practices. For AmerisourceBergen, the broad level of brand inflation is not as important as that once was due to our successful transition of our brand compensation to fee for service arrangement. 95% of our brand buy-side compensation is now covered by fee for service.

However, there are a select number of manufacturers, that has not transitioned to fee for service and for that group, our compensation for distribution services rendered throughout the year are realized as part of their pricing activity. If the economics we receive on the products from that sub-set of manufacturers were impacted, we would be go back and renegotiate to ensure that we receive fair compensation for the services we provide.

Now on the generic pricing front, we have been encouraged by recent manufacturer commentary regarding the portfolio rationalization and the observed trend of manufacturers not launching their ANDA-approved generics in markets that have sufficient supply. As we look ahead into fiscal 2019, we are anticipating a generic pricing environment similar to the one that we experienced at the tail end of the fiscal 2018. Given the positive stability and improvement we've seen in generic deflation, we will no longer break it out as a separate line item that we guide to in a regularly update. This trend of stabilization is certainly a positive for margins and cash flow and we are hopeful that this is the beginning stages of the normalization of deflation.

Turning now to the specific guidance metrics for our fiscal 2019. As a reminder, we do not provide forward-looking guidance on a GAAP basis. So while the following metrics are provided on an adjusted non-GAAP basis. Moving forward, the consolidation of Profarma and the specialty joint venture in Brazil will be included in our guidance. We will continue to have year-over-year comparison distortions until we've lapped the impact of this consolidation as a result of our incremental investment that was made in January of 2018.

Regarding revenue, we expect consolidated revenue growth in the mid single digit percent range, largely driven by growth within our broad portfolio of customers and multiple strategic partnerships. Regarding consolidated gross profit, while we do not provide specific guidance on gross profit, there are some considerations to point out. First, we have made great progress on rebounds in customer contracts, the process has been successful as our teams have been able to make a process a win-win for customers as the broader market continues to shift to include more specialty products.

Second, our sourcing team, is ensuring that we are staying competitive and procuring generics. Third, our leadership in the high growth specialty distribution business continues to differentiate AmerisourceBergen. And fourth, our leadership and growth in higher margin commercialization services and animal health businesses are positives for our overall margin profile. These gross profit benefits will be partly offset in fiscal 2019 by lower volumes at PharMEDium, certainly in the first half of the year and potentially for the year overall, which I will cover later in the Pharmaceutical Distribution Services segment section.

Regarding consolidating -- consolidated operating expenses, we expect consolidated operating expenses to grow in the mid-single digit percent range due to the consolidation of Brazil and the impact of an additional quarter of HD Smith. However we will almost certainly finish at the very high end of this range. We have been thoughtful in the integration of HD Smith to ensure that there is no impact to customer experience or service levels. We have had excellent customer retention and the integration of this business has done phenomenally well and there is a clear cultural fit.

As we move further into fiscal 2019, we will begin to capture more HD Smith synergies and fully expect to hit our run rate accretion target on time in fiscal 2020. If you were to normalize for the impact of the consolidation of Brazil and the elevated expenses related to HD Smith, our operating expense growth would be toward the lower end of mid single-digit. As always, our commitment is to remain diligent in investing and spending, focused on achieving the right benefits and returns while never sacrificing customer experience.

Now I will turn to consolidated operating income. We expect to grow operating income in the low to mid single digit percent range, helped this year by a return to growth by both of our operating segments. From a segment standpoint, we expect the following. In pharmaceutical distribution services, while PharMEDium's Memphis facility remains closed, we're working through the timing of this facility's reopening. We are incorporating a wide range for that segment's operating income growth and currently expect the segment's operating income to grow in the low single-to-mid single-digit percent range.

Without the potential headwinds from PharMEDium, the Pharmaceutical Distribution segment would be growing solidly in the mid-single-digits. It's worth noting that we've been working through remediation at the Memphis facility. We've also been implementing similar enhanced processes at our other three PharMEDium facilities, while continuing to operate them. There are some production limitations at those facilities during this implementation period.

On a more positive note, the Pharmaceutical Distribution segment continues to benefit from our leadership and specialty distribution, as we provide key services for our customers in a fast growing part of the market. Our strategic positioning in the specialty market is a clear differentiator for AmerisourceBergen. Additionally, the segment continues to benefit from having anchor customers under longer-term contracts with no large renewals in fiscal 2019.

Moving on to the other segment, businesses that focus on Global Commercialization Services and Animal Health. We are excited to see this group return to growth in fiscal 2019. We project that this group that helps differentiate AmerisourceBergen will grow operating income in the high single-digit percent range in fiscal 2019. World Courier is carrying its strong growth from 2018 into 2019. And MWI picked up strong momentum in the fourth quarter through the execution of margin initiatives and continued strengthening of its customer relationships and commercial partnerships.

This group's strong growth reflects the team's ability to unlock value and meet the growing demand for services to support specialty products in animal health, even if Lash is migrating customers to the Fusion platform. We are extremely excited by the work being done at World Courier, MWI and our other consulting businesses to drive this great growth expectation and we look forward to Lash returning to its normal level of growth in fiscal 2020 and beyond. Regarding interest expense, while we do not provide specific guidance on interest expense, I will highlight that the consolidation of Brazil and a full year with a debt issued to fund the HD Smith acquisition will cause our interest expense to be up about 7% year-over-year.

Moving to our consolidated tax rate expectation, our guidance assumes a full year adjusted tax rate of about 21% to 22%. While we do get the benefit of one additional quarter at the new US corporate tax rate this year, fiscal 2018's tax rate benefited from a certain level of employee stock option exercises and some discreet one-time items, all of which we do not expect to repeat.

Regarding share repurchases, as Tim detailed, we repurchased over $750 million of AmerisourceBergen shares. If you look at the entirety of fiscal 2018 in combination with the buying activity that we had in the month of October. This opportunistic share buyback represents a significant return of capital to our shareholders. Our fiscal 2019 guidance assumes that our share count will tick up a bit throughout the year due to employee stock option exercises and we expect to finish the year at around 216 million weighted average shares outstanding.

Moving to earnings per share, we expect our fiscal 2019 adjusted EPS to be in the range of $6.65 to $6.95, reflecting growth of 2% to 7%. Rather than providing a point in time deadline for the reopening and ramp up production at PharMEDium's Memphis facility as we did last year, we believe it is appropriate to incorporate into guidance a range of three scenarios at PharMEDium. First the business being a tailwind, second, its contribution being flat compared to fiscal 2018, and third a scenario that includes a lengthy delay in the opening of the Memphis facility, causing a sizable headwind from PharMEDium in fiscal 2019.

While we do not provide quarterly guidance, I will provide some incremental color to help explain the cadence of our EPS progression. Our fiscal first quarter of 2019 will likely be down slightly year-over-year, as we lapped a strong first quarter for PharMEDium in fiscal 2018. EPS growth will improve in the second quarter but overall, we expect our second half EPS growth will be much better than our first half EPS growth.

Moving to cash flow expectations, first CapEx is expected to be about $300 million. Over half of this CapEx spend relates to key projects that are being carried over from fiscal '18 including strategic technology investments like the expanded rollout of ABC Order, our customer order entry system; Lash's Fusion and World Courier's new logistic system NOVA. Additionally, as a result of our transformation efforts to further improve efficiency, we have decided to make the investment in bringing our specialty distribution group on to the SAP platform, which is a multi-year project with significant benefits including enhanced customer experience.

Now for free cash flow, we expect our free cash flow for fiscal 2019 to be between $1.4 billion and $1.6 billion. This cash generation level is impressive given the fiscal 2019 ends on a Monday, which is our worst cash day. As always, sales mix between specialty, brand and generic products, each of which have distinct cash conversion metrics is the driver that can move us within this range.

In closing, I look forward to taking on my new role as CFO of AmerisourceBergen, and as investors, you can continue to expect us to be focused on being strong stewards of capital, we are well positioned to deliver long-term sustainable growth and drive value for our shareholders in fiscal 2019 and beyond.

And with that, I will turn the call back over to Steve for some closing remarks.

Steve Collis -- Chairman, President and Chief Executive Officer

Thank you, Jim. Before we proceed with Q&A, I would like to share a few final remarks. AmerisourceBergen continues to execute and drive long-term growth in a highly complex dynamic healthcare environment. Everyday our teams collaborate and apply their expertise toward opportunities that serve our manufacturer and provider customers in more efficient and integrated ways. As the discussion of different healthcare system models continues, AmerisourceBergen will continue to be a thought leader, engaging with the policymakers and commercial partners to ensure that we are a driver of solutions, enabler of access and creator of additional efficiencies. We remain steadfast in our commitment to be a part of the solution and supported with the most cost efficient form and size of patient care.

Our differentiated strategy and ability to execute strongly position AmerisourceBergen for long-term growth. We think, plan and act strategically to improve efficiency, support partner growth, champion patient access and build long-term sustainable value for our shareholders. More than ever, we are united in our responsibility to create healthier futures. As always, we appreciate your interest in AmerisourceBergen.

I'll now turn it over to Bennett to start our Q&A.

Bennett Murphy -- Vice President, Investor Relations

Thanks, Steve. Given the length of management's remarks this morning, we will be extending the call past one hour needed for additional Q&A. Operator, we are ready to begin the Q&A.

Questions and Answers:

Operator

Thank you. (Operator Instructions) First question is from the line of Steven Valiquette, Barclays. Please go ahead.

Steven Valiquette -- Barclays Bank PLC -- Analyst

Okay, thanks, good morning, Steve and Jim and also Tim, just wanted to say definitely enjoyed our interactions over the years and best of luck for your future endeavours.

Tim Guttman -- Executive Vice President and Chief Financial Officer

Thanks, Steve, really appreciate it.

Steven Valiquette -- Barclays Bank PLC -- Analyst

All right. Just my quick question here really is, just curious as we think about PharMEDium and your potential future revenue run rates, just curious, has the industry growth stayed pretty robust for these products and services in 2018 and 2019 while you're partially out of the market? And then again, do you think you're still maintaining good relationships with customers today during this longer closure process or is it possible the longer it takes to resolve these issues, there could be a little bit of slippage on the prior volume? Thanks.

Steve Collis -- Chairman, President and Chief Executive Officer

Yeah, Steve. Yeah, thanks for the question. It's Steve Collis. Yeah, course and we are very disappointed with where we find ourselves with PharMEDium and as we know you all know, Memphis does remain close and I think it's important for us for you all to recall that we've already focused on the long term and in the long term, we committed to a healthy relationship, bilateral relationship with regulators. That's going to be key and being at the highest end of service in this industry.

PharMEDium was really such a large participant in the 503B industry and it was one of the key drivers for our -- with the new legislation, one of the key drivers for our decision to invest in the company. We focus right now on demonstrating the commitment to the FDA to the highest end of the regulatory compliance and patient safety. And that's going to be our priority. We think that the customers have been very supportive, we announced that a major award as the customers do look toward the future, however, we recognized that customers are frustrated also, so it's hard to gauge exactly how the market will respond when we are ready, particularly as we, we don't have a firm start date and -- so that's the frustration right now.

And it has our full attention, but I'll just end by saying that it's important to keep in the context of the overall progress that AmerisourceBergen and great results that we report in a very difficult market in fiscal 2018 and a relatively strong outlook for both segments, excluding PharMEDium, which we know, investors can't actually look at it like that, but it's probably helpful for you to see the strong trends that we have in the rest of our business. We'll take the next question or Jim -- sorry Jim wanted to say something as well.

James Cleary -- Executive Vice President and Group President, Global Commercialization Services & Animal Health

Yeah, just the -- following up on your comment, we're committed to not restart commercial operations pending further FDA feedback and of course, our priority is to demonstrate to the FDA our commitment to patient safety and compliance practices, but -- addressing your question, we really do feel that there is compelling patient need and significant market demand for safe and effective compounded sterile preparation products and we remain committed to being the market leader. PharMEDium remains committed to being the market leader in quality and the trusted partner to customers. So of course right now, so our priority remains patient safety, and we are dedicated to achieving full regulatory compliance.

Operator

Next question is from the line of Robert Jones, Goldman Sachs. Please go ahead.

Robert Jones -- Goldman Sachs Group Inc. -- Analyst

Great and yeah Tim, let me just echo that sentiment, it's been a pleasure working with you, best of luck.

Tim Guttman -- Executive Vice President and Chief Financial Officer

Thank you, Bob.

Robert Jones -- Goldman Sachs Group Inc. -- Analyst

Yeah, and I'm sure you'll get a few more on this, but I did want to stick with PharMEDium. I guess last quarter, you guys have obviously seemed very confident that you'd be able to resume production. By the time we got to fiscal '19 obviously today, it sounds like we're not quite there yet. I was just wondering may be what changed with the ongoing discussions with the FDA that has you rethinking the timeline and then how should we think about that relative to guidance? And then if I could just sneak in a follow-up related to that, in the 8-K today, obviously mentioned the DOJ, which is a new element. I'm just wondering if you could also share, how they now factor into this -- to this process? Thanks.

Tim Guttman -- Executive Vice President and Chief Financial Officer

Yeah and so we're committed to working with the FDA and working closely with them and not restarting operations, pending their, pending their further feedback and so we'll be actively working with them. And then with regard to how it really plays into guidance, and I want to echo something Steve said that, if we look at fiscal year '19, our portfolio of businesses is performing well. But of course, as we talked about today, we do have this PharMEDium issue and so we looked at it in three different scenarios in the guidance as we said. First, is the potential of it being a tailwind. Second is if the contribution being flat to fiscal 2018 and then there is a third scenario, that includes a lengthy delay of the opening of the Memphis facility, causing a sizable headwind from PharMEDium.

And let me kind of talk about it with regard to operating income at Pharmaceutical Distribution group. We said that the Pharmaceutical Distribution group of operating income in the low to mid single digits. And if the lower end of that range, without the PharMEDium impact, we would be solidly in the mid-single digits for Pharmaceutical Distribution. And so, the potential PharMEDium impact at the lower end of the range, is kind of it's 2% to 3% impact on operating income growth in the Pharmaceutical Distribution segment.

Steve Collis -- Chairman, President and Chief Executive Officer

Next question, please.

Operator

Next question is from the line of Charles Rhyee, Cowen & Company. Please go ahead.

Charles Rhyee -- Cowen & Company -- Analyst

Yeah, thanks for taking the question. So I just -- sorry, I just want to stay on PharMEDium one more time, just to follow up on Jim's comments there. So you're kind of suggesting that if we look at 2% to 3% of growth being from PharMEDium, it kind of sounds like that's like $0.15 to $0.20, which sound very well. Can you kind of describe maybe then what else in the range, certainly relative to where I think that the Street expectations were coming into, today for fiscal '19? May be kind of go over some of the other headwinds, I guess that could be affecting the growth as we think about this year? And I know it's -- earlier, we just talked about '19 now, but what would you kind of think about sort of the more sustainable long-term growth rate, once, let's say PharMEDium is sort of back on a normalized run rate growth? Thanks.

Tim Guttman -- Executive Vice President and Chief Financial Officer

Yeah, and so let me talk a little bit about what moves us within the guidance range, and it was said really the bigger thing that moves us within the guidance range is PharMEDium and the Memphis reopening into the production ramp. But the other things that really move up within the guidance range are business unit performance. And as we've said before, the portfolio of businesses performing well and we expect it to perform well in fiscal year '19. HD Smith synergies move us within the guidance range, management of our operating expenses, our expectations on generic deflation and branded inflation and then the mix between brand, generic and specialty. Those are kind of the numerous things that move us within the guidance range, but then, really kind of the biggest thing that's moved us within the guidance range is PharMEDium and any kind of timing with regards to Memphis reopening and production ramp.

Steve Collis -- Chairman, President and Chief Executive Officer

Yeah. And on the long term, the long-term model, may be just to add, we feel confident on -- in long term, we really mean the long term and ABC's approaches with the long-term perspective as we grow (ph) with our businesses and we would say, our growth with the market, which is again prescription demand continues to surge new product innovation and we're very well placed with our anchor customers. Our specialty business is a differentiator. Our commercialization services and in animal health, we have robust growth next year in 2019. And we think that those will carry on being differentiators for us. We have -- we'd be the excellent stewards of capital. We have active shareholder return policy.

So, we feel really good about our business in the long term. And we also feel that if you will -- like if you isolate the PharMEDium issue, we are competing very well in the competitive landscape that we're in. And we do have differentiation, we have some many businesses this year, Charles that have performed really well. We tried to point out our specialty distribution to physician businesses and the incredible result they posted, but also businesses like Xcenda and World Courier and our Innomar business in Canada that have really, really performed very well.

So I think that ABC is both complex and overall, really well-performing portfolio. MWI had a really strong fourth quarter. We were thrilled that their fourth quarter that came in ahead of our expectation. So there's a lot to be optimistic about it at AmerisourceBergen.

Bennett Murphy -- Vice President, Investor Relations

Next question.

Operator

Next question is from the line of Erin Wright, Credit Suisse. Please go ahead.

Erin Wright -- Credit Suisse AG -- Analyst

All right. Thanks. Two part question here. You mentioned you were encouraged by the portfolio rationalization across some generic manufacturers. Do you think, we're in a time period where you have greater visibility on the generic pricing environment? And then separately from a regulatory perspective, I guess, how should we think about the potential implications of Part B drugs moving to Part D as well as other concepts such as specialty step therapy for instance across your specialty business? How should we think about the impact of some of those proposals and what you're paying most attention to from a regulatory perspective? Thanks.

Steve Collis -- Chairman, President and Chief Executive Officer

We just -- we're pointing out that generic deflation is sort of in the range of what we've come to expect and more what's normal. We expect fiscal year '19 to be similar to the tail-end of fiscal year '18 and we are optimistic that in the long run, we'll return single digits. The stabilization is obviously we pointed out is good for -- not on the generic business, which is very important to us, but also with a cash flow, those are some of our highest return cash flow businesses.

On that, the Trump proposals to changes to Part B, we remain incredibly committed to the community setting. It's an active sitting. It's shown great growth this year. It's an active marketplace. And we think that the access to those life saving therapies and to community practitioners is very important to patients. There'e no data we've been able to show that says that setting is more expensive or that physicians prescribe based on economics. We don't -- we think that they prescribe based on the higher standards of therapy and protocol management. And we really are committed to seeing that those patients have access to care in their communities and particularly when you look at rural communities, and the job that rural community oncologists perform, it's really quite moving and to think that those communities could be threatened, those communities that just could be threatened is, obviously not something that we think regulators or CMS wants to encourage in any way. So we think that there will be a rational debate and we also feel that the people in DC and HCMS and HHS are understanding the issues and that we can be -- we can engage with a dialog with them and we are doing that.

Operator

And next question is from the line of George Hill, RBC. Please go ahead.

George Hill -- RBC Capital Markets -- Analyst

Good morning, guys and thanks for taking the question. And I want to say, Tim, on a personal and professional level, sad to see you go and Jim welcome to the call. I guess my question is on the brand drug pricing environment, where we're seeing the launch of generic introductions of high priced specialty drugs and price cuts for expensive brand drugs. I know that you guys have taken an aggressive approach to biosimilars and specialty drugs in the past. In your discussions with manufacturers, do you guys think you're going to be able to keep the unit economics the same in the face of some of these price cuts for brand drugs needs authorized share of quantities?

Steve Collis -- Chairman, President and Chief Executive Officer

Yeah, it's a good question, George, look, the market dynamic, I'll just reiterate that ABC's confidence in our value proposition. We are confident that the economics that we receive are fair. It's also always important to remember that we have both buy and sell side economics and we have flexibility in how we price contracts.

I think that some of these trades are very interesting and we discussed this at length in our business reviews what should our strategy be with the manufacturers and that is all sorts of strategies being deployed is not necessarily one in terms of what the reimbursement codes are in terms of, it is the brand product being taken out the market and we have this quasi-biosimilar type product. Everyone is adopting different strategies. What we are sure about it is in AmerisourceBergen is a valued partner by all those manufacturers. We've been engaged at the highest level in those launches and participated actively and supported our partner strategies in the marketplace and there is no doubt that there is a drive toward greater transparency in the marketplace and we think some of those trends as they benefit the overall system and as they benefit patients, will benefit AmerisourceBergen as well and we are very confident that we will participate actively in those therapies and in those price changes as the market adapts.

Next question please?

Operator

Next question, Lisa Gill, JPMorgan. Please go ahead.

Michael Minchak -- JP Morgan Chase & Co -- Analyst

Thanks and good morning, it's actually Mike Magnetek in for Lisa. You guys have talked to it in the past about your efforts to implement differential pricing strategies across different product types. Just wondering if you could sort of update us on your efforts there and sort of what inning you'd say we're at with respect to that?

Tim Guttman -- Executive Vice President and Chief Financial Officer

Can you actually repeat it? Sorry.

Steve Collis -- Chairman, President and Chief Executive Officer

Sorry, I didn't quite get that.

Michael Minchak -- JP Morgan Chase & Co -- Analyst

Yes, sure. Just with respect to -- you guys have previously talked about efforts to implement differential pricing strategies across different pharma product types, I guess where do you stand with that process and sort of what inning are you at?

Steve Collis -- Chairman, President and Chief Executive Officer

Yeah, so we've been very successful with our rebalancing, I mean, if you look, obviously we went into the biggest customers first and we've been -- so those have been taken care and as large customers came up, we've had the discussion.

I think on the sell side, Mark, we've been happy with the way we've been able to renew contracts and have that rebalancing discussion. Look, the larger customers definitely understand this. I mean, some of the trends are very discernable in terms of the growth, the specialty generic deflation et cetera, the newest therapies, the innovative therapies like cell therapy. So we've been able to have these discussions and look, like everything we do at least -- it's much more complex right and the categories, our brand are not just brand and generic, it's biosimilars, it's cell therapies, it's specialty drugs, it's mature oral solid products.

So we have been able to having discussions and frankly there is much more complexity in our contracting. We're well over half way through that, because we have Irish contracts anywhere from three to six years or so, some are longer, but that's the general range. So, yeah, they all maybe -- some that haven't come up, but the most strategic and essential customers that, we are in discussions with them constantly about, down to even some key product launches. So this is not work that's once and done, it's iterative and continues literally -- almost in some cases on a weekly basis, you could say with key customers.

And we have some very large customers, of course, we talked a lot about Walgreens, but there's also big customers like Kaiser and Express Scripts and CPA and in the bed business, Banfield and Florida Cancer and our community oncology business there. We literally are having constant discussions. AmerisourceBergen is very customer and market facing. So we are accessible to the customers and we're having discussions constantly. Jim or Tim, anything you'd like to add?

James Cleary -- Executive Vice President and Group President, Global Commercialization Services & Animal Health

Yes, Steve. I'll add. As I start in this role, there's really, kind of two things that kind of gave me the confidence to take on this role. One is the phenomenal team that Tim has built up and the second really gets to your question and that's that confidence that I have in our value proposition, both on the buy side and on the sell side. And you know as we look at traditional products or new products, one thing I'll come back to is cost to replace our services would be significantly higher than the fees that we capture given the efficiency of our business. So as we look at new products, whether it'd be biosimilars or other sorts of things, pricing does become more complex but we come back to the fact that we've got confidence and our value propositions.

Tim Guttman -- Executive Vice President and Chief Financial Officer

Yeah, if I can Steve, I'm kind of itching to answer your question, so -- no just looking at our track record, I mean, we've had several announcements of large contracts that we've renewed over the last couple of years and we called out no margin headwind. So again, I think that's proving that we're making progress to the market and we continue to move the initiative forward in terms of repricing, that's what we're committed to.

Bennett Murphy -- Vice President, Investor Relations

Next question, please.

Operator

Next is Eric Percher, Nephron Research. Please go ahead.

Eric Percher -- Nephron Research LLC -- Analyst

Thank you. You mentioned that your assumption for brand price inflation is mid-single digits and that is consistent with historic practice. How does that sit relative to the conversations you're having with manufacturers, particularly that 5% that are not fee for service, but also the entire book as you think about what occurs beginning January 1st?

Steve Collis -- Chairman, President and Chief Executive Officer

Yeah, Eric, thanks for the question. Okay, there is no doubt, we're going to be -- and of course we have a certain conference that we will be attending very early in January. So there is no doubt that we are going to be very intrigued by what happens in the marketplace. But as we said, it's really those select group of manufacturers that we are still -- that price inflation is a part of the overall economics we receive. Look, if there should not have price increases, we would absolutely have a discussion, we think that that's a fair and balanced discussion to have. We don't think that inflation should be a part of the overall compensation we receive or an important part of it. And there are other elements of course to the compensation we receive from those manufacturers. But we are going to be very interested, as I'm sure you will be, to see what happens in January and what the environment is. There's no doubt that anything beyond mid to maybe 7%, 8% price inflation increase would be surprising in this environment.

Bennett Murphy -- Vice President, Investor Relations

Operator, we have time for one more question.

Operator

And that question is from Ricky Goldwasser, Morgan Stanley. Please go ahead.

Ricky Goldwasser -- Morgan Stanley -- Analyst

Yeah, hi, good morning and thank you for letting -- getting me on the call and Tim, best of luck. Enjoyed very much working with you.

Tim Guttman -- Executive Vice President and Chief Financial Officer

Thanks, Ricky.

Ricky Goldwasser -- Morgan Stanley -- Analyst

So my question relates to opioids. Just trying to better understand why you think that we shouldn't think about the opioid expense as a recurring one? And that's one and the second of all, should we think about New York as a proxy when we think about the relative potential impact from opioids in other states?

Tim Guttman -- Executive Vice President and Chief Financial Officer

Yeah, thanks for the question. So, we expect that the expenses for '17 and '18 that we've experienced in New York related to the Opioid Stewardship Act are not expected to be normal. And so that's why they are excluded from our adjusted results. And what we've done is we've adjusted our Pharmaceutical Distribution logistics for New York which will substantially eliminate fees -- expenses going forward. And with regard to other states, it's really us too early for us to comment on what might happen in other states, Rickey.

Steve Collis -- Chairman, President and Chief Executive Officer

Yeah, So, I think Ricky, we're going to end there and let me just make some closing remarks. So we obviously have -- we wished that we would have better news to share with you on PharMEDium. But I just want to end by reemphasizing that ABC is strongly positioned going forward. We have a differentiated policy, differentiated strategies around specialty and around our commercialization business. We feel that we are very aligned and very in sync with key customers, when it happens due key trends. We have been strong stewards of capital and we are growing in fiscal year '19 if you just -- just depending on how PharMEDium performs and please recognize that we are not entirely in control of when Memphis will be restarted and when the other operations will be able to resume. But clearly, there has been a delay in what we had originally communicated to you on the last conference.

So I again thank you for your time and let me just say one more time that we are very pleased with ABC's positioning and our marketplace and our differentiated policies around specialty and commercialization. Thank you.

Operator

Thank you. Ladies and gentlemen, that does conclude your conference. We do thank you for joining. You may now disconnect.

Duration: 74 minutes

Call participants:

Bennett Murphy -- Vice President, Investor Relations

Steve Collis -- Chairman, President and Chief Executive Officer

Tim Guttman -- Executive Vice President and Chief Financial Officer

James Cleary -- Executive Vice President and Group President, Global Commercialization Services & Animal Health

Steven Valiquette -- Barclays Bank PLC -- Analyst

Robert Jones -- Goldman Sachs Group Inc. -- Analyst

Charles Rhyee -- Cowen & Company -- Analyst

Erin Wright -- Credit Suisse AG -- Analyst

George Hill -- RBC Capital Markets -- Analyst

Michael Minchak -- JP Morgan Chase & Co -- Analyst

Eric Percher -- Nephron Research LLC -- Analyst

Ricky Goldwasser -- Morgan Stanley -- Analyst

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