Cardinal Health, Inc. Reports Fiscal 2015 First-Quarter Results

DUBLIN, Ohio, Oct. 30, 2014 /PRNewswire/ -- Cardinal Health today reported fiscal year 2015 first-quarter revenue of $24.1 billion and non-GAAP diluted earnings per share (EPS) from continuing operations of $1.00. Non-GAAP operating earnings increased 6 percent to $566 million. On a GAAP basis, operating earnings decreased 1 percent to $466 million, and diluted EPS from continuing operations decreased 21 percent to $0.78. Prior year first quarter GAAP and non-GAAP EPS included an $0.18 benefit related to tax settlements. Excluding the impact of these tax settlements, non-GAAP diluted EPS for the fiscal year 2015 first quarter increased 9 percent.

"Fiscal year 2015 is off to a good start. Our organization has committed itself to anticipating and acting on the evolving needs of a fast-changing market," said George Barrett, chairman and chief executive officer of Cardinal Health. "Both segments reported solid earnings growth and progress on all strategic fronts. Our Pharmaceutical segment continued its momentum, and we are excited about the potential from Red Oak Sourcing, our generic sourcing joint venture with CVS Health. The Medical segment continued its growth with strategic accounts and our direct-to-customer platforms, now rebranded as Cardinal Health at Home. Our physician preference item program addresses significant health system pain points and now spans orthopedics, interventional cardiology and wound management."

The company reaffirmed its fiscal year 2015 outlook for non-GAAP diluted earnings per share from continuing operations of $4.10 to $4.30.

Q1 FY15 SUMMARY

SEGMENT RESULTS

Pharmaceutical segment

Revenue for the Pharmaceutical segment declined 3 percent to $21.2 billion due to the expiration of the Walgreens contract in the prior year first quarter. The decline was partially offset by growth from new and existing customers as well as continued strong growth in China. Segment profit increased 4 percent to $451 million, driven by growth from new and existing customers as well as strong performance from generic programs.

Medical segment

Revenue for the Medical segment was up 5 percent to $2.9 billion, driven by strong performance from acquisitions and the positive net impact of customer volume. Segment profit increased 6 percent to $113 million due to growth in Cardinal Health-branded products as well as select service offerings, partially offset by a reduction in contribution from national brand products.

ADDITIONAL FIRST-QUARTER AND RECENT HIGHLIGHTS 

• Completed $360 million of share repurchases in the first quarter under the expanded repurchase authorization approved by the board of directors in August 2014
• Named Michael C. Kaufmann as chief financial officer and Jon Giacomin to the role of chief executive officer of the Pharmaceutical segment, currently held by Mike Kaufmann, with both positions to be effective on Nov. 11, 2014
• Acquired Emerge Medical, an orthopedic trauma manufacturer, and Innovative Therapies, a negative pressure wound therapy company
• Donated more than 1 million products to emergency response efforts to help contain the Ebola outbreak in West Africa
• Donated more than $4 million to more than 20 universities through the company's nationwide pharmacy scholarship program, now in its fourth year

CONFERENCE CALL

Cardinal Health will host a webcast and conference call today at 8:30 a.m. Eastern to discuss first-quarter results. To access the call and corresponding slide presentation, visit ir.cardinalhealth.com, or dial 816.581.1703, using conference ID# 1088767. There is no access code required for the call.  

There is no pre-registration for the call. Participants are advised to dial into the call at least 10 minutes prior to the start time.

Presentation slides and an audio replay will be archived on the Cardinal Health website after the conclusion of the conference call. The audio replay will also be available for seven days by dialing 719.457.0820, passcode 1088767.

UPCOMING WEBCASTED INVESTOR EVENTS

• Annual Meeting of Shareholders at 8 a.m. local time on Nov. 5 at the company headquarters in Dublin, Ohio
  
  
• Credit Suisse Healthcare Conference at 8 a.m. local time on Nov. 11 in Phoenix

At these events, Cardinal Health executives will discuss the company's diverse products and services, company performance and strategies for continued growth. To access more details and live webcasts of these events, go to the Investors page at ir.cardinalhealth.com.

About Cardinal Health

Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is a $91 billionhealth care services company that improves the cost-effectiveness of health care. As the business behind health care, Cardinal Health helps pharmacies, hospitals, ambulatory surgery centers, clinical laboratories and physician offices focus on patient care while reducing costs, enhancing efficiency and improving quality. Cardinal Health is an essential link in the health care supply chain, providing pharmaceuticals and medical products and services to more than 100,000 locations each day and is also the industry-leading direct-to-home medical supplies distributor. The company is a leading manufacturer of medical and surgical products, including gloves, surgical apparel and fluid management products. In addition, the company operates the nation's largest network of radiopharmacies that dispense products to aid in the early diagnosis and treatment of disease. Ranked #22 on the Fortune 500, Cardinal Health employs 34,000 people worldwide. More information about the company may be found at www.cardinalhealth.com and @CardinalHealth on Twitter.

¹ See the attached tables for definitions of the non-GAAP financial measures presented in this news release and reconciliations of the differences between the non-GAAP financial measures and their most directly comparable GAAP financial measures.

Cardinal Health uses its website as a channel of distribution for material company information. Important information, including news releases, financial information, earnings and analyst presentations, and information about upcoming presentations and events is routinely posted and accessible on the Investors page at ir.cardinalhealth.com. In addition, our website allows investors and other interested persons to sign up automatically to receive e-mail alerts when we post news releases, SEC filings and certain other information on our website.

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 statements may be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," "likely," and similar expressions, and include statements reflecting future results or guidance, statements of outlook and expense accruals. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These risks and uncertainties include competitive pressures in Cardinal Health's various lines of business; the ability to achieve the expected benefits from the generic sourcing joint venture with CVS Health; the frequency or rate of pharmaceutical price appreciation or deflation and the timing of generic and branded pharmaceutical introductions; the non-renewal or a default under one or more key customer or supplier arrangements or changes to the terms of or level of purchases under those arrangements; the ability to achieve anticipated results from the AccessClosure and Sonexus Health acquisitions; uncertainties due to government health care reform including federal health care reform legislation; changes in the distribution patterns or reimbursement rates for health care products and services; the effects of any investigation or action by any regulatory authority; and changes in the cost of commodities such as oil-based resins, cotton, latex and diesel fuel. Cardinal Health is subject to additional risks and uncertainties described in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports.

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