- Revenue increases 5 percent to $22 billion
- Operating earnings up 9 percent to $490 million
- Diluted earnings per share from continuing operations rise 15 percent to
$0.82 per share
- Non-GAAP diluted EPS from continuing operations increases 15 percent to
$0.86 per share
- Full year EPS guidance reaffirmed, outlook revised for Healthcare Supply
Chain Services-Pharmaceutical segment
DUBLIN, Ohio, Nov. 5 /PRNewswire-FirstCall/ -- Cardinal Health, a
global provider of products and services that improve the safety and
productivity of health care, today reported a 15 percent increase in
earnings per share during its first quarter, led by strong profit growth in
its clinical and medical products businesses and ongoing programs to
repurchase shares and streamline operations.
For the quarter ended Sept. 30, revenue increased 5 percent to $22
billion, operating earnings increased 9 percent to $490 million and
earnings per share from continuing operations rose 15 percent to $0.82, or
$0.86(1) on a non-GAAP basis.
"Our first quarter results were solid and led by very strong
performance in our Clinical and Medical Products sector, which now accounts
for 30 percent of segment profits," said R. Kerry Clark, chief executive
officer of Cardinal Health.
Cardinal Health also reaffirmed its annual earnings-per-share guidance,
while lowering the profit outlook for its Healthcare Supply Chain Services-
Pharmaceutical segment. The company continues to expect a strong second
half of the fiscal year, led by continued growth in clinical and medical
products and a significant increase in generic product introductions.
"We are disappointed with the performance in our Healthcare Supply
Chain Services-Pharmaceutical segment, but have a positive outlook for the
second half of the fiscal year for the company," Clark said. "Our Clinical
and Medical Products sector will be a key growth driver, and we also expect
to benefit from new generic pharmaceutical launches and improvements in
operational performance."
Cardinal Health separately announced that Mark W. Parrish, who led the
Healthcare Supply Chain Services sector, is leaving the company. Chief
Financial Officer Jeffrey W. Henderson will assume the additional role of
interim CEO of Healthcare Supply Chain Services until a permanent successor is
named.
Q1 FY08 Summary
Q1 FY08 Q1 FY07 Y/Y
Revenue $22 billion $21 billion 5%
Operating Earnings $490 million $451 million 9%
Non-GAAP Operating
Earnings(2) $512 million $475 million 8%
Earnings from
Continuing
Operations $303 million $291 million 4%
Non-GAAP Earnings
from Continuing
Operations(3) $318 million $309 million 3%
Diluted EPS from
Continuing Operations $0.82 $0.71 15%
Non-GAAP Diluted EPS
from Continuing
Operations $0.86 $0.75 15%
First quarter segment results:
Healthcare Supply Chain Services Sector
-- Revenue for the Healthcare Supply Chain Services-Pharmaceutical segment
grew 4 percent during the quarter to $19.2 billion, with sales to non-
bulk customers declining 2 percent to $10.3 billion and sales to bulk
customers increasing 11 percent to $8.9 billion. Segment profit
increased 6 percent to $305 million, benefiting from the $14 million
adjustment of a vendor related reserve, and partially dampened by sales
mix, generic market conditions, nuclear pharmacy pricing pressure and a
moderation in the sale of prescription drugs.
-- Revenue for the Healthcare Supply Chain Services-Medical segment
increased 6 percent to $1.9 billion, with improving demand in new and
existing hospital, laboratory and ambulatory customers. Segment profit
declined 10 percent to $58 million due primarily to a previously
disclosed change in corporate cost allocation that reduced profit by 9
percentage points. The company continues to expect a return to
profitable growth in the segment later this fiscal year and made
progress against that goal during the quarter with continued
improvements in customer service operations and strength in its
hospital supply business.
Clinical and Medical Products Sector
-- Revenue for the Clinical Technologies and Services segment increased 9
percent to $649 million from continued strong demand for Alaris(R) and
Pyxis(R) products. Segment profit increased 91 percent to $98 million
with good sales momentum from the fourth quarter in dispensing products
and a favorable mix of product revenue. The segment also benefited
from a favorable comparison to the prior-year period where a $13.5
million charge was taken for the recall of Alaris SE products.
-- Revenue for the Medical Products and Technologies segment increased 47
percent to $623 million, led by strong sales of new products and the
addition of VIASYS Healthcare, acquired by Cardinal Health in June.
Segment profit grew 24 percent to $57 million and benefited from the
integration of VIASYS, which remains ahead of the company's schedule.
Additional first quarter and recent highlights include:
-- Repurchasing approximately $600 million of Cardinal Health shares
during the quarter and announcing an additional two-year, $2 billion
repurchase authorization in August.
-- Introducing several new products, including Esteem Micro surgical
gloves made from a proprietary, latex-free material; new Presource(R)
surgical kits for cosmetic procedures and to help prevent central line
infections; the LTV 1150 ventilator for home use; and CareFusion(TM)
Transfusion Verification with Rapid Infusion for use in hospital
emergency rooms.
-- Signing an exclusive marketing agreement with Sentry Data Systems to
offer eligible hospitals and health care facilities technology services
that help cost-efficiently extend care to the uninsured and
underinsured under the federal 340B Drug Pricing program.
-- Launching the $1 million, Cardinal Health Patient Safety Challenge
Grant program to support initiatives to improve safety in U.S.
hospitals. More than 700 hospitals responded to the challenge and are
competing for 30 to 40 grants.
-- Breaking ground on a $50 million expansion of the company's
headquarters in Ohio to consolidate its Healthcare Supply Chain
Services businesses.
Outlook
Cardinal Health reiterated its fiscal 2008 guidance range of $3.95 to
$4.15 for non-GAAP diluted EPS from continuing operations. In addition, the
company revised the outlook for its Healthcare Supply Chain Services-
Pharmaceutical segment, which is now expected to grow profit during the
year below its long term goal of 7 to 10 percent growth. Cardinal Health
previously said profit growth for this segment was expected to be in line
with the long term range.
Conference Call
Cardinal Health will host a conference call and webcast at 8:30 a.m.
EST to discuss the results. To access the call and corresponding slide
presentation, go to the Investor page at http://www.cardinalhealth.com. The
conference call may also be accessed by calling 617-213-4857, passcode
21392080. An audio replay will be available until 11:30 p.m. EST on Nov. 7
at 617-801-6888, passcode 50524989. A transcript and audio replay will also
be available at http://www.cardinalhealth.com.
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 and No. 1 in
its sector on Fortune's ranking of Most Admired firms, 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: Non-GAAP earnings
from continuing operations divided by diluted weighted average shares
outstanding.
(2) Non-GAAP operating earnings: Operating earnings excluding special
items and impairment charges and other.
(3) Non-GAAP earnings from continuing operations: Earnings from
continuing operations excluding special items and impairment charges
and other, both net of tax.
A reconciliation of the differences between these non-GAAP financial
measures and their most directly comparable GAAP financial measures is
provided in the attached tables and at http://www.cardinalhealth.com.
This news release contains forward-looking statements addressing
expectations, prospects, estimates and other matters that are dependent
upon future events or developments. These 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:
competitive pressures in its 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
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 and
administrative proceedings; successful integration of Cardinal Health and
VIASYS Healthcare and the ability to achieve synergies from the
acquisition; and general economic and market conditions. This news release
reflects management's views as of Nov. 5, 2007. Except to the extent
required by applicable law, Cardinal Health undertakes no obligation to
update or revise any forward-looking statement.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(in millions, except per Common Share First Quarter
amounts) 2008 2007 % Change
Revenue $21,973.4 $20,937.5 5%
Cost of products sold 20,631.2 19,737.0 5%
Gross margin $1,342.2 $1,200.5 12%
Selling, general and administrative
expenses 830.1 725.5 14%
Impairment charges and other (0.2) 1.7 N.M.
Special items:
Restructuring charges 14.8 11.8 N.M.
Acquisition integration charges 5.4 1.9 N.M.
Litigation and Other 2.3 8.4 N.M.
Operating earnings $489.8 $451.2 9%
Interest expense and other 42.9 37.8 13%
Earnings before income taxes and
discontinued operations $446.9 $413.4 8%
Provision for income taxes 143.7 122.0 18%
Earnings from continuing operations $303.2 $291.4 4%
Loss from discontinued operations
(net of tax (expense) / benefit of
$(2.0) and $19.8 for the first quarter
of fiscal 2008 and 2007, respectively) (1.4) (20.7) N.M.
Net earnings $301.8 $270.7 11%
Basic Earnings (Loss) per Common
Share:
Continuing operations $0.83 $0.72 15%
Discontinued operations - (0.05) N.M.
Net basic earnings per Common Share $0.83 $0.67 24%
Diluted Earnings (Loss) per Common
Share:
Continuing operations $0.82 $0.71 15%
Discontinued operations - (0.05) N.M.
Net diluted earnings per Common Share $0.82 $0.66 24%
Weighted Average Number of Shares
Outstanding:
Basic 363.0 404.5
Diluted 370.2 413.0
CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 30, June 30,
(in millions) 2007 2007
Assets
Cash and equivalents $1,289.6 $1,308.8
Short-term investments available for
sale - 132.0
Trade receivables, net 4,904.7 4,714.4
Current portion of net investment in
sales-type leases 369.1 354.8
Inventories 7,150.8 7,383.2
Prepaid expenses and other 619.0 651.3
Total current assets $14,333.2 $14,544.5
Property and equipment, net 1,683.1 1,647.0
Net investment in sales-type leases,
less current portion 830.5 820.7
Goodwill and other intangibles, net 5,822.8 5,860.9
Other assets 328.5 280.7
Total assets $22,998.1 $23,153.8
Liabilities and Shareholders' Equity
Current portion of long-term
obligations and other short-term
borrowings $386.8 $16.0
Accounts payable 9,099.0 9,162.2
Other accrued liabilities 1,623.0 2,247.3
Liabilities from businesses held for
sale and discontinued operations 5.2 34.2
Total current liabilities $11,114.0 $11,459.7
Long-term obligations, less current
portion and other short-term borrowings 3,347.5 3,457.3
Deferred income taxes and other
liabilities 1,468.4 859.9
Total shareholders' equity 7,068.2 7,376.9
Total liabilities and shareholders'
equity $22,998.1 $23,153.8
CARDINAL HEALTH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
First Quarter
(in millions) 2008 2007
Cash Flows From Operating Activities:
Net earnings $301.8 $270.7
Loss from discontinued operations 1.4 20.7
Earnings from continuing operations $303.2 $291.4
Adjustments to reconcile earnings
from continuing operations to net cash
provided by operating activities:
Depreciation and amortization 94.9 78.4
Asset impairments (0.2) 1.7
Equity compensation 26.1 37.4
Provision for bad debts 5.0 5.4
Change in operating assets and
liabilities, net of effects from
acquisitions:
(Increase) / decrease in trade
receivables (191.9) 107.0
Decrease in inventories 232.4 119.8
Increase in net investment in
sales-type leases (24.1) (20.9)
Decrease in accounts payable (63.2) (131.5)
Other accrued liabilities and
operating items, net 57.0 181.8
Net cash provided by operating
activities - continuing operations $439.2 $670.5
Net cash (used in) / provided by
operating activities - discontinued
operations (30.4) 16.1
Net cash provided by operating activities $408.8 $686.6
Cash Flows From Investing Activities:
Acquisition of subsidiaries, net of
divestitures and cash acquired $(88.1) $(64.5)
Proceeds from sale of property and
equipment 2.5 3.6
Additions to property and equipment (91.5) (68.7)
Sale of investment securities
available for sale, net 131.9 41.9
Net cash used investing activities
- continuing operations $(45.2) $(87.7)
Net cash provided by investing activities
- discontinued operations - 3.6
Net cash used in investing activities $(45.2) $(84.1)
Cash Flows From Financing Activities:
Net change in commercial paper and
short-term borrowings $232.0 $105.4
Reduction of long-term obligations (13.0) (27.8)
Proceeds from long-term obligations,
net of issuance costs 0.1 1.7
Proceeds from issuance of Common Shares 105.5 57.3
Tax benefits from exercises of
stock options 11.6 12.5
Dividends on Common Shares (44.3) (37.0)
Purchase of treasury shares (674.7) (445.3)
Net cash used in financing activities
- continuing operations $(382.8) $(333.2)
Net cash used in financing activities
- discontinued operations - (12.5)
Net cash used in financing activities $(382.8) $(345.7)
Net (decrease) / increase in cash
and equivalents (19.2) 256.8
Cash and equivalents at beginning of
period $1,308.8 $1,187.3
Cash and equivalents at end of period $1,289.6 $1,444.1
CARDINAL HEALTH, INC. AND SUBSIDIARIES
BUSINESS ANALYSIS
TOTAL COMPANY
Non-GAAP
First Quarter First Quarter
(in millions) 2008 2007 2008 2007
Revenue
Amount $21,973 $20,938
Growth Rate 5% 11%
Operating Earnings
Amount $490 $451 $512 $475
Growth Rate 9% 23% 8% 23%
Earnings from Continuing Operations
Amount $303 $291 $318 $309
Growth Rate 4% 24% 3% 24%
Refer to the GAAP / Non-GAAP Reconciliation for Non-GAAP calculations.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
SEGMENT BUSINESS ANALYSIS
HEALTHCARE SUPPLY CHAIN SERVICES CLINICAL AND MEDICAL PRODUCTS
First Quarter First Quarter
(in millions) 2008 2007 (in millions) 2008 2007
PHARMACEUTICAL CLINICAL TECHNOLOGIES AND SERVICES
Revenue Revenue
Amount $19,221 $18,533 Amount $649 $594
Growth Rate 4% 12% Growth Rate 9% 3%
Mix 86% 87% Mix 3% 3%
Segment Profit (1) Segment Profit (1)
Amount $305 $289 Amount $98 $51
Growth Rate 6% 28% Growth Rate 91% (10)%
Mix 59% 64% Mix 19% 12%
Segment Profit Segment Profit
Margin 1.59% 1.56% Margin 15.14% 8.66%
MEDICAL MEDICAL PRODUCTS AND TECHNOLOGIES
Revenue Revenue
Amount $1,921 $1,806 Amount $623 $424
Growth Rate 6% 2% Growth Rate 47% 11%
Mix 8% 8% Mix 3% 2%
Segment Profit (1) Segment Profit (1)
Amount $58 $64 Amount $57 $46
Growth Rate (10)% (1)% Growth Rate 24% 36%
Mix 11% 14% Mix 11% 10%
Segment Profit Segment Profit
Margin 2.99% 3.55% Margin 9.13% 10.86%
(1) Refer to definitions for an explanation of segment profit.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
ASSET MANAGEMENT ANALYSIS
First Quarter
2008 2007
Receivable Days 22.2 16.9
Days Inventory on Hand 28 30
Debt to Total Capital 35% 26%
Net Debt to Capital 26% 11%
Return on Equity 16.7% 12.8%
Non-GAAP Return on Equity 17.5% 13.6%
Return on Invested Capital 6.57% 5.14%
Non-GAAP Return on Invested Capital 7.50% 5.93%
Effective Tax Rate from Continuing
Operations 32.2% 29.5%
Non-GAAP Effective Tax Rate from
Continuing Operations 32.3% 29.4%
Refer to the GAAP / Non-GAAP Reconciliation for Non-GAAP calculations.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
SCHEDULE OF NOTABLE ITEMS
(in millions, except per Common First Quarter
Share amounts) 2008 2007
Special Items
Restructuring charges $(14.8) $(11.8)
Acquisition integration charges (5.4) (1.9)
Litigation and other (2.3) (8.4)
Total special items $(22.5) $(22.1)
Tax benefit 7.7 5.8
Special items, net of tax $(14.8) $(16.3)
Decrease to diluted EPS from
continuing operations $(0.04) $(0.04)
Impairment Charges and Other
Impairment charges and other $0.2 $(1.7)
Tax (expense) / benefit (0.1) 0.6
Net impairment charges and other,
net of tax $0.1 $(1.1)
Decrease to diluted EPS from
continuing operations $- $-
Weighted Average Number of Diluted
Shares Outstanding 370.2 413.0
CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
First Quarter 2008
Impairment
(in millions, except per Common Special Charges and
Share amounts) GAAP Items Other Non-GAAP
Operating Earnings
Amount $490 $23 - $512
Growth Rate 9% 8%
Provision for Income Taxes $144 $8 - $151
Earnings from Continuing Operations
Amount $303 $15 - $318
Growth Rate 4% 3%
Diluted EPS from Continuing
Operations
Amount $0.82 $0.04 - $0.86
Growth Rate 15% 15%
First Quarter 2007
Impairment
Special Charges and
GAAP Items Other Non-GAAP
Operating Earnings
Amount $451 $22 $2 $475
Growth Rate 23% 23%
Provision for Income Taxes $122 $6 $1 $128
Earnings from Continuing Operations
Amount $291 $16 $1 $309
Growth Rate 24% 24%
Diluted EPS from Continuing
Operations
Amount $0.71 $0.04 - $0.75
The sum of the components may not equal the total due to rounding
CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
First Quarter
(in millions) 2008 2007
GAAP Return on Equity 16.7% 12.8%
Non-GAAP Return on Equity
Net earnings $301.8 $270.7
Special items, net of tax, in
continuing operations 14.8 16.3
Special items, net of tax, in
discontinued operations - 1.4
Adjusted net earnings $316.6 $288.4
Annualized $1,266.4 $1,153.6
Divided by average shareholders'
equity (1) $7,222.6 $8,455.9
Non-GAAP return on equity 17.5% 13.6%
First Quarter
(in millions) 2008 2007
GAAP Return on Invested Capital 6.57% 5.14%
Non-GAAP Return on Invested Capital
Net earnings $301.8 $270.7
Special items, net of tax, in
continuing operations 14.8 16.3
Special items, net of tax, in
discontinued operations - 1.4
Interest expense and other, net of tax 27.5 23.6
Adjusted net earnings $344.1 $312.0
Annualized $1,376.4 $1,248.0
Divided by average total invested
capital (2) $18,365.9 $21,050.9
Non-GAAP return on invested capital 7.50% 5.93%
(1) The average shareholders' equity shown above is calculated using the
average of the prior years' fourth quarter and the current quarter.
(2) The average total invested capital shown above is calculated using the
average of the prior years' quarter and the current quarter. Total
invested capital is calculated as the sum of the current portion of
long-term obligations and other short-term borrowings, long-term
obligations, current portion of long-term obligations and other
short-term borrowings in discontinued operations, long-term
obligations in discontinued operations, total shareholders' equity and
unrecorded goodwill. Unrecorded goodwill is $7.5 billion and
$9.7 billion, respectively, for the September 30, 2007 and 2006
calculations. Current portion of long-term obligations and other
short-term borrowings in discontinued operations, and long-term
obligations in discontinued operations were $59.2 million and $46.6
million at June 30, 2006 and September 30, 2006, respectively.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
First Quarter
(in millions) 2008 2007
GAAP Effective Tax Rate from Continuing
Operations 32.2% 29.5%
Non-GAAP Effective Tax Rate from
Continuing Operations
Earnings before income taxes and
discontinued operations $446.9 $413.4
Special items 22.5 22.1
Adjusted earnings before income
taxes and discontinued operations $469.4 $435.5
Provision for income taxes $143.7 $122.0
Special items tax benefit 7.7 5.8
Adjusted provision for income taxes $151.4 $127.8
Non-GAAP effective tax rate from
continuing operations 32.3% 29.4%
First Quarter
2008 2007
Debt to Total Capital 35% 26%
Net Debt to Capital
Current portion of long-term
obligations and other short-term
borrowings $386.8 $280.1
Long-term obligations, less current
portion and other short-term
borrowings 3,347.5 2,616.0
Debt $3,734.3 $2,896.1
Cash and equivalents (1,289.6) (1,444.1)
Short-term investments available for sale - (456.5)
Net debt $2,444.7 $995.5
Total shareholders' equity $7,068.2 $8,421.1
Capital $9,512.9 $9,416.6
Net debt to capital 26% 11%
Forward-Looking Non-GAAP Financial Measures
The Company presents non-GAAP operating earnings, non-GAAP earnings from
continuing operations, non-GAAP return on equity and non-GAAP effective
tax rate from continuing operations (and presentations derived from these
financial measures) on a forward-looking basis. The most directly
comparable forward-looking GAAP measures are operating earnings, earnings
from continuing operations, return on equity and effective tax rate from
continuing operations. The Company is unable to provide a quantitative
reconciliation of these forward-looking non-GAAP measures to the most
comparable forward-looking GAAP measures because the Company cannot
reliably forecast special items and impairment charges and other, which
are difficult to predict and estimate and are primarily dependent on
future events. Please note that the unavailable reconciling items could
significantly impact the Company's future financial results.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
DEFINITIONS
GAAP
Debt: long-term obligations plus short-term borrowings
Debt to Total Capital: debt divided by (debt plus total shareholders'
equity)
Diluted EPS from Continuing Operations: earnings from continuing
operations divided by diluted weighted average shares outstanding
Effective Tax Rate from Continuing Operations: provision for income
taxes divided by earnings before income taxes and discontinued operations
Operating Cash Flow: net cash provided by / (used in) operating
activities from continuing operations
Segment Profit: segment revenue minus (segment cost of products sold and
segment selling, general and administrative expenses)
Segment Profit Margin: segment profit divided by revenue
Segment Profit Mix: segment profit divided by total segment profit for
all operating segments
Return on Equity: annualized net earnings divided by average
shareholders' equity
Return on Invested Capital: annualized net earnings divided by (average
total shareholders' equity plus debt plus unrecorded goodwill)
Revenue Mix: segment revenue divided by total revenue for all segments
NON-GAAP
Economic Profit: segment net operating earnings, after-tax minus
(tangible capital multiplied by weighted average cost of capital);
Tangible Capital is the quarterly average calculated as total assets
allocated to the segment less (total liabilities allocated to the segment,
goodwill and intangibles, cash and equivalents and short term investments
available for sale)
Economic Profit Margin: economic profit divided by revenue
Net Debt to Capital: net debt divided by (net debt plus total
shareholders' equity)
Net Debt: debt minus (cash and equivalents and short-term investments
available for sale)
Non-GAAP Diluted EPS from Continuing Operations: non-GAAP earnings from
continuing operations divided by diluted weighted average shares
outstanding
Non-GAAP Diluted EPS from Continuing Operations Growth Rate: (current
period non-GAAP diluted EPS from continuing operations minus prior period
non-GAAP diluted EPS from continuing operations) divided by prior period
non-GAAP diluted EPS from continuing operations
Non-GAAP Earnings from Continuing Operations: earnings from continuing
operations excluding special items and impairment charges and other, both
net of tax
Non-GAAP Earnings from Continuing Operations Growth Rate: (current
period non-GAAP earnings from continuing operations minus prior period
non-GAAP earnings from continuing operations) divided by prior period
non-GAAP earnings from continuing operations
Non-GAAP Effective Tax Rate from Continuing Operations: (provision for
income taxes adjusted for special items) divided by earnings before income
taxes and discontinued operations adjusted for special items)
Non-GAAP Operating Earnings: operating earnings excluding special items
and impairment charges and other
Non-GAAP Operating Earnings Growth Rate: (current period non-GAAP
operating earnings minus prior period non-GAAP operating earnings) divided
by prior period non-GAAP operating earnings
Non-GAAP Return on Equity: (annualized current period net earnings plus
special items minus special items tax benefit) divided by average
shareholders' equity
Non-GAAP Return on Invested Capital: (annualized net earnings plus
special items minus special items tax benefit plus interest expense and
other, net of tax) divided by (average total shareholders' equity plus
debt plus unrecorded goodwill)
CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
(in millions)
HEALTHCARE SUPPLY CHAIN SERVICES First Quarter Fiscal 2008
Pharmaceutical July August September Total
Economic Profit Margin
Segment profit $305.4
Effective tax rate from
continuing operations 35.9%
Net operating earnings, after-tax
(NOPAT) $195.6
Total assets $11,591.6 $11,719.5 $11,574.7
Less: assets from
discontinued operations - - -
Less: accounts payable 7,350.3 7,948.1 8,344.0
Less: other accrued
liabilities 1,211.8 1,173.2 1,130.7
Less: liabilities from
businesses held for sale - - -
Less: deferred income taxes
and other liabilities 88.8 86.7 35.0
Less: goodwill and other
intangibles, net 1,351.2 1,344.9 1,345.2
Less: cash and equivalents 65.4 51.4 38.3
Less: short-term investments
available for sale - - -
Tangible capital $1,524.1 $1,115.2 $681.5 $1,106.9
Multiplied by weighted average
cost of capital 2.3%
Capital charge $25.5
Economic profit $170.1
Revenue $19,220.8
Economic profit margin 0.88%
(in millions)
HEALTHCARE SUPPLY CHAIN SERVICES First Quarter Fiscal 2007
Pharmaceutical July August September Total
Economic Profit Margin
Segment profit $288.7
Effective tax rate from
continuing operations 35.1%
Net operating earnings, after-tax
(NOPAT) $187.5
Total assets $11,549.8 $12,206.9 $11,620.0
Less: assets from
discontinued operations 107.5 109.4 -
Less: accounts payable 7,488.3 8,027.1 8,101.0
Less: other accrued
liabilities 1,069.5 1,088.6 1,016.3
Less: liabilities from
businesses held for sale - - -
Less: deferred income taxes
and other liabilities 82.1 82.1 71.0
Less: goodwill and other
intangibles, net 1,354.5 1,361.8 1,332.4
Less: cash and equivalents 42.2 57.4 75.0
Less: short-term investments
available for sale - - -
Tangible capital $1,405.7 $1,480.5 $1,024.3 $1,303.5
Multiplied by weighted average
cost of capital 2.3%
Capital charge $30.0
Economic profit $157.5
Revenue $18,532.8
Economic profit margin 0.85%
(1) Tangible Capital is a quarterly average calculated as total assets
allocated to the segment less (total liabilities allocated to the
segment, goodwill and intangibles, cash and equivalents and short term
investments available for sale)
(2) The sum of the components may not equal the total due to rounding
(3) Healthcare Supply Chain Services - Pharmaceutical Tangible Capital
calculated for both current and prior fiscal year includes an
allocation of payables previously held at Corporate to more accurately
reflect the payable balance of the segment.
CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
(in millions)
HEALTHCARE SUPPLY CHAIN SERVICES First Quarter Fiscal 2008
Medical July August September Total
Economic Profit Margin
Segment profit $57.5
Effective tax rate from continuing
operations 29.3%
Net operating earnings, after-tax
(NOPAT) $40.6
Total assets $2,481.8 $2,515.4 $2,552.6
Less: assets from discontinued
operations - - -
Less: accounts payable 539.0 581.0 615.0
Less: other accrued liabilities 67.0 71.7 53.5
Less: liabilities from businesses
held for sale - - -
Less: deferred income taxes and
other liabilities 54.6 55.4 61.3
Less: goodwill and other
intangibles, net 386.0 385.9 388.2
Less: cash and equivalents 24.4 25.7 21.6
Less: short-term investments
available for sale - - -
Tangible capital $1,410.8 $1,395.7 $1,413.0 $1,406.5
Multiplied by weighted average
cost of capital 2.3%
Capital charge $32.3
Economic profit $8.3
Revenue $1,920.7
Economic profit margin 0.43%
HEALTHCARE SUPPLY CHAIN SERVICES First Quarter Fiscal 2007
Medical July August September Total
Economic Profit Margin
Segment profit $64.1
Effective tax rate from continuing
operations 29.8%
Net operating earnings, after-tax
(NOPAT) $45.0
Total assets $2,442.1 $2,437.6 $2,456.6
Less: assets from discontinued
operations - - -
Less: accounts payable 534.8 478.7 510.4
Less: other accrued liabilities 71.1 78.1 49.4
Less: liabilities from businesses
held for sale - - -
Less: deferred income taxes and
other liabilities 58.2 58.1 53.0
Less: goodwill and other
intangibles, net 378.8 377.8 377.7
Less: cash and equivalents 2.9 3.0 4.1
Less: short-term investments
available for sale - - -
Tangible capital $1,396.3 $1,441.9 $1,462.0 $1,433.4
Multiplied by weighted average
cost of capital 2.3%
Capital charge $33.0
Economic profit $12.0
Revenue $1,806.1
Economic profit margin 0.66%
(1) Tangible Capital is a quarterly average calculated as total assets
allocated to the segment less (total liabilities allocated to the
segment, goodwill and intangibles, cash and equivalents and short term
investments available for sale)
(2) The sum of the components may not equal the total due to rounding
CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
(in millions)
CLINICAL AND MEDICAL PRODUCTS First Quarter Fiscal 2008
Clinical Technologies and Services July August September Total
Economic Profit Margin
Segment profit $98.3
Effective tax rate from continuing
operations 24.2%
Net operating earnings, after-tax
(NOPAT) $74.5
Total assets $4,375.8 $4,301.6 $4,262.2
Less: assets from discontinued
operations - - -
Less: accounts payable 82.0 63.3 62.3
Less: other accrued liabilities 575.9 592.2 250.3
Less: liabilities from businesses
held for sale - - -
Less: deferred income taxes and
other liabilities 238.4 238.9 474.5
Less: goodwill and other
intangibles, net 2,171.8 2,206.2 2,180.4
Less: cash and equivalents 217.3 195.5 175.4
Less: short-term investments
available for sale - - -
Tangible capital $1,090.4 $1,005.5 $1,119.3 $1,071.7
Multiplied by weighted average
cost of capital 2.3%
Capital charge $24.6
Economic profit $49.9
Revenue $648.9
Economic profit margin 7.69%
CLINICAL AND MEDICAL PRODUCTS First Quarter Fiscal 2007
Clinical Technologies and Services July August September Total
Economic Profit Margin
Segment profit $51.5
Effective tax rate from continuing
operations 29.2%
Net operating earnings, after-tax
(NOPAT) $36.5
Total assets $3,916.6 $4,012.1 $3,880.1
Less: assets from discontinued
operations - - -
Less: accounts payable 91.2 84.7 79.4
Less: other accrued liabilities 277.2 287.9 223.4
Less: liabilities from businesses
held for sale - - -
Less: deferred income taxes and
other liabilities 577.6 577.0 475.1
Less: goodwill and other
intangibles, net 2,085.9 2,083.4 2,174.3
Less: cash and equivalents 66.2 60.1 82.6
Less: short-term investments
available for sale - - 0.3
Tangible capital $818.5 $919.0 $845.0 $860.8
Multiplied by weighted average cost
of capital 2.3%
Capital charge $19.8
Economic profit $16.7
Revenue $594.5
Economic profit margin 2.81%
(1) Tangible Capital is a quarterly average calculated as total assets
allocated to the segment less (total liabilities allocated to the
segment, goodwill and intangibles, cash and equivalents and short term
investments available for sale)
(2) The sum of the components may not equal the total due to rounding
CARDINAL HEALTH, INC. AND SUBSIDIARIES
GAAP / NON-GAAP RECONCILIATION
(in millions)
CLINICAL AND MEDICAL PRODUCTS First Quarter Fiscal 2008
Medical Products and Technologies July August September Total
Economic Profit Margin
Segment profit $56.9
Effective tax rate from continuing
operations 13.1%
Net operating earnings, after-tax
(NOPAT) $49.4
Total assets $3,645.8 $3,661.3 $3,601.6
Less: assets from discontinued
operations - - -
Less: accounts payable 123.8 127.9 123.1
Less: other accrued liabilities 270.7 266.5 207.0
Less: liabilities from businesses
held for sale - - -
Less: deferred income taxes and
other liabilities 203.5 203.9 180.0
Less: goodwill and other
intangibles, net 1,945.4 1,952.2 1,910.5
Less: cash and equivalents 445.7 469.5 503.0
Less: short-term investments
available for sale - - -
Tangible capital $656.7 $641.3 $678.0 $658.7
Multiplied by weighted average cost
of capital 2.3%
Capital charge $15.2
Economic profit $34.2
Revenue $623.2
Economic profit margin 5.49%
CLINICAL AND MEDICAL PRODUCTS First Quarter Fiscal 2007
Medical Products and Technologies July August September Total
Economic Profit Margin
Segment profit $46.0
Effective tax rate from continuing
operations 7.0%
Net operating earnings, after-tax
(NOPAT) $42.8
Total assets $1,455.5 $1,453.1 $1,506.0
Less: assets from discontinued
operations - - -
Less: accounts payable 107.3 88.5 118.3
Less: other accrued liabilities 119.3 124.7 89.1
Less: liabilities from businesses
held for sale - - -
Less: deferred income taxes and
other liabilities 46.2 46.6 44.4
Less: goodwill and other
intangibles, net 454.8 453.7 453.4
Less: cash and equivalents 136.9 144.9 197.8
Less: short-term investments
available for sale - - -
Tangible capital $591.0 $594.7 $603.0 $596.2
Multiplied by weighted average cost
of capital 2.3%
Capital charge $13.7
Economic profit $29.1
Revenue $423.6
Economic profit margin 6.87%
(1) Tangible Capital is a quarterly average calculated as total assets
allocated to the segment less (total liabilities allocated to the
segment, goodwill and intangibles, cash and equivalents and short term
investments available for sale)
(2) The sum of the components may not equal the total due to rounding
SOURCE Cardinal Health, Inc.
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Related links:
http://www.cardinalhealth.com/
CONTACT:
Media, Jim Mazzola, +1-614-757-3690,
jim.mazzola@cardinal.com, or Investors, Bob Reflogal,
+1-614-757-7542, bob.reflogal@cardinal.com
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