Press Releases

During the fourth quarter, ended June 30, consolidated revenue increased 5 percent to $22.3 billion and earnings from continuing operations declined 22 percent to $238 million primarily due to merger-related charges from the company’s recent acquisition of VIASYS Healthcare.  On a non-GAAP basis, earnings from continuing operations increased 5 percent to $345 million¹, or 14 percent to $0.89² on a diluted per-share basis.

 

R. Kerry Clark, chief executive officer of Cardinal Health said:  “Fiscal 2007 was a strong year and marks an inflection point in the performance of the company.  In the fourth quarter, our core supply chain services sector performed as we previously indicated, and delivered robust full-year results.  Within the sector, pharmaceutical supply chain had a good year and we continue to anticipate a strong fiscal 2008 for this business.

 

“Within our clinical and medical products sector, we delivered excellent performance during the fourth quarter and have great momentum as we begin fiscal 2008.  This sector complements our supply chain business and continues to differentiate Cardinal Health in the market.  It has also emerged as significant, value-creating growth engine by contributing more than 25 percent of total segment profit during the year.”

 

      – Revenue for the Healthcare Supply Chain Services-Pharmaceutical segment grew 4 percent during the quarter to $19.6 billion, with core, direct-store-door pharmaceutical sales increasing 7 percent to $10.4 billion and sales to bulk customers increasing 4 percent to $8.8 billion.  Revenue in the prior-year period included specialty distribution sales of $225 million, a business the company has since sold.  Segment profit declined 3 percent to $303 million driven by the timing of several items in the fourth quarter of last year. 

 

For the full year, segment revenue grew 9 percent to $76.6 billion and segment profit increased 14 percent to $1.3 billion.

 

      – Revenue for the Healthcare Supply Chain Services-Medical segment increased 5 percent to $1.9 billion and segment profit declined 2 percent to $83 million.  Segment profit was impacted by an increase in customer-related write-offs from the prior-year of $7 million.  With new management and additional investments made in operations, the company continues to expect the segment to achieve profitable growth later in fiscal 2008.

 

For the full year, segment revenue rose 4 percent to $7.5 billion and segment profit increased 1 percent to $318 million.

 

      – Revenue for the Clinical Technologies and Services segment increased 17 percent to $756 million from continued strong sales of Alaris^® and Pyxis^® products. With a favorable product mix and ongoing operational improvements, segment profit increased 50 percent from the prior-year period to $144 million. In addition, the segment continues to achieve greater installation productivity from customer service investments made earlier in the year.  Backlog and committed contracts for Pyxis products grew to record levels and are expected to provide momentum throughout fiscal 2008.

 

For the full year, segment revenue grew 11 percent to $2.7 billion and segment profit increased 20 percent to $386 million.

 

      – Revenue for the Medical Products Manufacturing segment increased 14 percent to $500 million with strong sales in nearly all product categories and demand for new products contributing to segment profit growth of 27 percent to $58 million.  Segment profit margins expanded as the business continued to benefit from a shift to higher margin products and its One Cardinal Health restructuring efforts and sourcing initiatives.  The addition of VIASYS Healthcare, which Cardinal Health acquired late in the quarter, contributed 3 percentage points of revenue growth to the segment and had a negligible impact on segment profit.

 

For the full year, segment revenue increased 12 percent to $1.8 billion and segment profit rose 20 percent to $198 million.

 

      – Repurchasing $1.6 billion of Cardinal Health shares during the quarter and $4.1 billion during fiscal 2007 and to date.  The company announced yesterday an additional two-year, $2 billion repurchase authorization.

      – Successful completion of the VIASYS Healthcare acquisition in late June and the implementation of global integration teams to achieve the projected three-year synergies of $85 million to $100 million.

      – Cardinal Health’s 2007 Retail Business Conference in Boston where the company announced new services, including an expansion of its Leader^® Total Pharmacy Manager offering for retail independent pharmacies.

      – Signing six new contracts with key hospitals and health systems to provide medication management solutions that integrate Cardinal Health’s distribution, automation and bedside verification products and services.  These strategic agreements highlight the success of the company’s integrated offerings and its integrated hospital sales organization.  Sales to hospitals now represent approximately 20 percent of Cardinal Health’s annual revenue.

      – Growing sales of Cardinal Health’s proprietary generic-formulary program by more than 30 percent during the year.

      – Reaching agreements to resolve an SEC investigation and securities-related litigation that pertained to financial reporting and disclosures from 2000 to 2004.

      – Announcing a planned expansion of the company’s headquarters in Central Ohio with the addition of 700 positions that will relocate from operations in Northern Illinois.

 

Revenue for the full year climbed 9 percent to $87 billion and earnings from continuing operations declined 28 percent to $840 million.  On a non-GAAP basis, earnings from continuing operations rose 13 percent to $1.4 billion from the prior year.  Diluted EPS from continuing operations declined 24 percent to $2.07.  Non-GAAP diluted EPS from continuing operations increased 20 percent to $3.42.

 

 

Cardinal Health reiterated its fiscal 2008 guidance range of $3.95 to $4.15 for non-GAAP diluted EPS from continuing operations.
 

Cardinal Health will host a conference call and webcast at 8:30 a.m. EDT to discuss the results. To access the call and corresponding slide presentation, go to the Investor page at www.cardinalhealth.com.  The conference call may also be accessed by calling 617-213-4858, conference passcode 33769240.  An audio replay will be available until 5 p.m. EDT on Aug. 13 at 617-801-6888, passcode 46687143.  A transcript and audio replay will also be available at 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^® IV pumps, Pyxis^® automated dispensing systems, MedMined™ data mining software and the CareFusion™ 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 www.cardinalhealth.com.

 

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¹Non-GAAP earnings from continuing operations:  Earnings from continuing operations excluding special items and impairment charges and other, both net of tax.

 

²Non-GAAP diluted EPS from continuing operations:  Non-GAAP earnings from continuing operations divided by diluted weighted average shares outstanding.

³Non-GAAP operating earnings:  Operating earnings excluding special items and impairment charges and other.

 

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 thatare 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 pharmaceutical price appreciation; 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; uncertainties related to finalizing the pending settlement of the class-action securities litigation, including obtaining court approval of the settlement; 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 August 9, 2007.  Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement.