DUBLIN, Ohio, July 8 /PRNewswire-FirstCall/ -- Cardinal Health, a
global provider of products and services that improve the safety and
productivity of health care, today announced a consolidation of its
businesses into two primary operating and reporting segments to reduce
costs and align resources with the unique needs of each segment.
Cardinal Health's network of pharmaceutical and medical product
distribution centers and nuclear pharmacies will form the Healthcare Supply
Chain Services segment, led by Vice Chairman George S. Barrett. With annual
revenue of more than $80 billion, this segment serves customers in North
America with efficient and secure distribution services for prescription
medicine and medical products.
Industry leading products for infusion, medication dispensing,
respiratory care and infection prevention will be grouped in the Clinical
and Medical Products segment under the leadership of Vice Chairman David L.
Schlotterbeck. With annual revenue of approximately $5 billion, this
segment serves global customers with clinically differentiated products
used in hospitals and other primary care facilities.
The segments will be connected by a lean corporate organization and
Cardinal Health's hospital sales force.
With these changes, the company will reduce its workforce by
approximately 600 positions under a restructuring charge of approximately
$63 million, the substantial majority of which it expects to recognize in
the current fiscal year, which began July 1. Of those positions, about 160
are currently open and will not be filled. Employees affected will be
offered severance benefits.
"Through this restructuring, we sharpen our focus on two distinct,
large and growing segments of the health care industry by aligning our
resources, reducing costs and helping to speed decision making for our
customers," said R. Kerry Clark, chairman and CEO of Cardinal Health. "In
many ways, these changes formalize the organization we began to put in
place 18 months ago and will make us a stronger company that has a greater
focus on both our supplier-customers and provider-customers, with a goal of
creating more value for shareholders.
"In fiscal '09, we remain committed to the turn-around of our
pharmaceutical supply chain business, as we continue to strengthen our
medical supply chain business, invest in an innovative pipeline of clinical
products and ensure we have strong regulatory compliance programs in place
across the company. We will also continue to optimize our portfolio to
strengthen the core business. In all, we will do fewer things exceptionally
well, all under our mission to make health care safer and more productive."
Healthcare Supply Chain Services
The Healthcare Supply Chain Services segment consolidates
pharmaceuticals and medical products from thousands of manufacturers into
site-specific deliveries to retail pharmacies, hospitals, physician
offices, surgery centers and alternate care facilities. With more than
18,000 employees in operations across North America, Cardinal Health
provides comprehensive financial, inventory, contract management and
marketing services. Cardinal Health is also the largest provider of
specialized nuclear pharmaceuticals, delivering more than 13 million doses
each year to hospitals and outpatient care centers.
Clinical and Medical Products
The Clinical and Medical Products segment manufactures medication
infusion and dispensing products, respiratory equipment, surgical
instruments and leading technologies and services that help hospitals
prevent medication errors, reduce hospital-acquired infections and manage
medications and supplies more efficiently. Cardinal Health products provide
protection against medication errors for more than 3.1 billion doses each
year using CareFusion(R) patient identification systems, Alaris(R) infusion
devices and Pyxis(R) medication dispensing systems. Infection prevention
products include Converters(R) brand surgical gowns, Esteem(R) brand
medical gloves, Chloraprep(R) brand preoperative skin preparation products,
as well as electronic infection surveillance through MedMined(R) services.
The segment also leads in the respiratory care category through its AVEA(R)
respirators and other leading ventilation brands. Clinical and Medical
Products' global operations employ more than 20,000 people on five
continents.
As part of the restructuring, Cardinal Health will also separately
report results for a group of other businesses as a third reporting
segment. These units include Pharmacy Services (outsourced hospital
pharmacy management services), Tecomet (orthopedic implants and
instruments), Medsystems (enteral devices and airway management products)
and Medicine Shoppe International. While these businesses continue to add
value to Cardinal Health, the company will be conducting an in-depth review
during the next 12 months to evaluate their fit in the existing segment
structure.
Outlook and Q4 Earnings Call
The company reaffirmed that non-GAAP diluted earnings per share from
continuing operations(1) for fiscal 2008 are expected to be about in the
middle of a $3.75 to $3.85 range, excluding the potential dilutive impact
of the Enturia acquisition of 1 to 2 cents.
Cardinal Health will announce fourth quarter and full-year results on
Aug. 7 during an extended call with financial analysts and investors. At
that time, the company will provide its financial outlook for the current
year and provide historic financial data, recast according to the new
reporting segments. Going forward, the company will report and provide
guidance based on the primary segments with relevant metrics for the key
underlying businesses in each.
The Aug. 7 conference call and webcast will begin at 8:30 a.m. EDT at
the Investor page of http://www.cardinalhealth.com. The conference call may also
be accessed by dialing 617-213-4850, passcode 97674427.
Participants are advised to pre-register at the Investor page at
http://www.cardinalhealth.com or to dial into the call at least ten minutes prior
to the start time. Pre-registrants are issued a pin number that provides
faster access to the live call. Presentation slides, an audio replay and a
transcript will be archived on the Web site after the conclusion of the
meeting. The audio replay will also be available until 11:30 p.m. EDT on
August 9 by dialing 617-801-6888, passcode 28260453.
About Cardinal Health
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is an
$87 billion, global company serving the health care industry with products
and services that help hospitals, physician offices and pharmacies reduce
costs, improve safety, productivity and profitability, and deliver better
care to patients. With a focus on making supply chains more efficient,
reducing hospital-acquired infections and breaking the cycle of harmful
medication errors, Cardinal Health develops market leading technologies,
including Alaris(R) IV pumps, Pyxis(R) automated dispensing systems,
MedMined(TM) infection surveillance services and the CareFusion(TM) patient
identification system. The company also manufactures medical and surgical
products and is one of the largest distributors of pharmaceuticals and
medical supplies worldwide. Ranked No. 19 on the Fortune 500, Cardinal
Health employs more than 40,000 people on five continents. More information
about the company may be found at http://www.cardinalhealth.com .
(1) Non-GAAP diluted EPS from continuing operations: earnings from
continuing operations, excluding special items and impairment charges
and other, both net of tax, divided by diluted weighted average shares
outstanding.
Non-GAAP Financial Measures
Cardinal Health presents non-GAAP earnings from continuing operations
(and presentations derived from this financial measure, including per share
calculations) on a forward-looking basis. The most directly comparable
forward-looking GAAP measure is earnings from continuing operations. The
company is unable to provide a quantitative reconciliation of this forward-
looking non-GAAP measure to the most directly comparable forward-looking
GAAP measure, because the company cannot reliably forecast special items
and impairment charges and other, which are difficult to predict and
estimate. Please note that the unavailable reconciling items could
significantly impact the company's future financial results.
Cautions Concerning Forward-Looking Statements
This news release contains forward-looking statements addressing
expectations, prospects, estimates and other matters that are dependent
upon future events or developments. These expectations, prospects,
estimates and other matters are subject to risks and uncertainties that
could cause actual results to differ materially from those projected,
anticipated or implied. The most significant of these uncertainties are
described in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K reports
(including all amendments to those reports) and exhibits to those reports,
and include (but are not limited to) the following: difficulties, delays or
additional costs in implementing the restructuring program; competitive
pressures in Cardinal Health's various lines of business; the loss of one
or more key customer or supplier relationships or changes to the terms of
those relationships; uncertainties relating to timing of generic and
branded pharmaceutical introductions and the frequency or rate of branded
pharmaceutical price appreciation or generic pharmaceutical price
deflation; changes in the distribution patterns or reimbursement rates for
health care products and/or services; the results, consequences, effects or
timing of any inquiry or investigation by any regulatory authority or any
legal or administrative proceedings; future actions of regulatory bodies or
government authorities relating to Cardinal Health's manufacturing or sale
of products and other costs or claims that could arise from its
manufacturing, compounding or repackaging operations or from its other
services; the costs, difficulties and uncertainties related to the
integration of acquired businesses; and conditions in the pharmaceutical
market and general economic and market conditions. This news release
reflects management's views as of July 8, 2008. Except to the extent
required by applicable law, Cardinal Health undertakes no obligation to
update or revise any forward-looking statement.
SOURCE Cardinal Health
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Related links:
http://www.cardinalhealth.com
CONTACT:
Media: Jim Mazzola, +1-614-757-3690,
jim.mazzola@cardinalhealth.com, or Investors: Sally Curley,
+1-614-757-7115, sally.curley@cardinalhealth.com, both of
Cardinal Health
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