Press Releases

For the third quarter ended March 31, revenue increased 8 percent to $21.9 billion.  A $5 million loss from continuing operations was due to establishment of the $600 million reserve toward resolving outstanding securities litigation.  On a non-GAAP basis, earnings from continuing operations increased 10 percent to $390 million¹, or 16 percent to $0.96² on a diluted per-share basis.

 

“Results for the third quarter were solid, with good execution in our pharmaceutical supply chain segment and continued momentum in the market for our Alaris and Pyxis products,” said R. Kerry Clark, chief executive officer of Cardinal Health.  “We have plenty of opportunities to improve – especially in our medical supply chain segment – but have established good momentum through three quarters of the year.

 

“We also made progress in mediation discussions and took important steps toward resolving the outstanding class-action securities litigation.  We are eager to put this matter behind us and focus our full attention on the future.”

 

 

•     Revenue for the Healthcare Supply Chain Services-Pharmaceutical segment grew 8 percent to $19.2 billion, with direct-store-door (DSD) pharmaceutical sales growing 11 percent to $10.5 billion and bulk customer sales growing 11 percent to $8.4 billion.  Strong branded buy-side margins and the launch of new generic pharmaceuticals during the quarter contributed to a 15-percent increase in segment profit to $380 million.

 

•     Revenue for the Healthcare Supply Chain Services-Medical segment increased 4 percent to $1.9 billion, with growth in laboratory sales and Canadian operations that were partially offset by weakness in sales to acute care facilities.  Continued investments to improve customer service contributed to an increase in the segment’s selling, general and administrative (SG&A) expenses and lower segment profit.  Segment profit was $89 million for the quarter, a decline of 5 percent from the prior-year period.

 

•     Revenue for the Clinical Technologies and Services segment increased 12 percent to $674 million from continued strong sales of Alaris^® and Pyxis^® products. Segment profit also grew 12 percent, to $98 million. During the quarter, Cardinal Health announced an industry-first offering that will further improve medication safety through integration of its CareFusion™ bedside verification application, Pyxis MedStation^® and Alaris IV pumps. In addition, the Food and Drug Administration approved plans for the Alaris SE line of infusion pumps that enables the company to correct units that were seized and those at customer sites.  

 

•     Revenue for the Medical Products Manufacturing segment increased 11 percent to $458 million led by continued, strong demand for surgical drapes, gowns and masks, exam gloves and special procedure products.  Segment profit grew 4 percent to $47 million and was negatively affected by several unusual expenses during the quarter and planned investments in international and in the research and development of new products. 

 

•     Repurchase of $1.4 billion of Cardinal Health shares during the quarter and approximately $2.4 billion to date in the fiscal year.

 

•     Divestiture of the Pharmaceutical Technologies and Services segment for $3.3 billion to the Blackstone Group.  In the fourth quarter, the company received net proceeds of $3.2 billion for the sale and will record the remaining balance of an approximately $1.1 billion gain on the sale. (As disclosed in its second-quarter earnings release and Form 10-Q filing, $425 million of the gain was recorded in the second quarter).

 

•     Return on equity of 0.9 percent, or 19.7 percent on a non-GAAP basis.  Non-GAAP return on equity⁴ increased substantially from the prior-year period due to strong non-GAAP earnings and lower shareholders’ equity from share buybacks.

 

•     Operating cash flow of $676 million, an increase of $465 million from the prior-year period.

 

Cardinal Health reiterated its fiscal 2007 guidance range of $3.25 to $3.40 for non-GAAP diluted EPS from continuing operations.

 

Cardinal Health will host a conference call and webcast at 11 a.m. Eastern Daylight Time (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 617-786-2903, conference passcode 78983422.  An audio replay will be available until 5 p.m. EDT on April 30 at 617-801-6888, passcode 85219462.  A transcript and audio replay will also be available at www.cardinalhealth.com.

 

Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is an $80 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/(loss)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/(loss) excluding special items and impairment charges and other.

 

⁴Non-GAAP return on equity:  (annualized current period net earnings plus special items minus special items tax benefit) divided by average shareholders' equity.

 

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 www.cardinalhealth.com.

 

Except for historical information, all other information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended.  These forward-looking statements 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; 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, or settlement discussions with regulatory authorities or plaintiffs in any action against the company; uncertainties related to completing a settlement of the class-action securities litigation or, if completed, obtaining court approval of the settlement, uncertainties regarding whether the amount reserved associated with the class-action securities litigation will be sufficient, and uncertainties regarding the timing or final terms of any settlement; and general economic and market conditions.  Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement.