- Fourth quarter revenue increased 12% to $59.9 billion
- Fourth quarter GAAP1 operating earnings were
$401 million and GAAP diluted EPS was
$0.96
- Fourth quarter non-GAAP operating earnings increased 14% to
$605 million and non-GAAP diluted EPS
increased 29% to $1.84
- Fiscal Year 2024 operating cash flow and adjusted free cash
flow reached all-time highs of $3.8
billion and $3.9 billion,
respectively
- Fiscal year 2025 non-GAAP EPS guidance raised to
$7.55 to $7.70, from at least $7.50
DUBLIN,
Ohio, Aug. 14, 2024 /PRNewswire/ -- Cardinal
Health (NYSE: CAH) today reported fourth quarter fiscal year
2024 revenues of $59.9 billion, an
increase of 12% from the prior year. GAAP operating earnings were
$401 million and GAAP diluted earnings per share (EPS) were
$0.96. Non-GAAP operating earnings
increased 14% to $605 million, driven
primarily by segment profit increases in Global Medical Products
and Distribution (GMPD) and Pharmaceutical and Specialty Solutions.
Non-GAAP diluted earnings per share (EPS) increased 29% to
$1.84 in the quarter, reflecting the
increase in non-GAAP operating earnings across the business, lower
interest and other expense, a lower non-GAAP effective tax rate and
a lower share count.
Fiscal year 2024 revenues were $226.8
billion, an 11% increase from fiscal year 2023. GAAP
operating earnings were $1.2 billion
and GAAP diluted EPS was $3.45.
Non-GAAP operating earnings increased 16% to $2.4 billion, driven primarily by segment profit
increases in GMPD and Pharmaceutical and Specialty Solutions.
Non-GAAP diluted EPS increased 29% to $7.53 for the year, reflecting the increase in
non-GAAP operating earnings across the business, lower interest and
other expense, a lower non-GAAP effective tax rate and a lower
share count following in-year share repurchases.
"Fiscal 2024 marked a year of strong operational execution and
record financial results, delivered in tandem with key strategic
progress in the portfolio," said Jason
Hollar, CEO of Cardinal Health. "We delivered robust cash
flow generation, continued profit growth in the Pharmaceutical and
Specialty Solutions segment and significant improvement driven by
our GMPD Improvement Plan. We enter the new fiscal year with
momentum and confidence, evidenced by our raised fiscal year 2025
guidance."
Q4 and full year FY24 summary2
|
Q4
FY24
|
|
Q4 FY23
|
|
Y/Y
|
|
FY24
|
|
FY23
|
|
Y/Y
|
Revenue
|
$59.9
billion
|
|
$53.4
billion
|
|
12 %
|
|
$226.8
billion
|
|
$205.0
billion
|
|
11 %
|
Operating
earnings/(loss)
|
$401
million
|
|
$111 million
|
|
N.M.
|
|
$1,243
million
|
|
$752 million
|
|
65 %
|
Non-GAAP operating
earnings
|
$605
million
|
|
$530 million
|
|
14 %
|
|
$2.4
billion
|
|
$2.1 billion
|
|
16 %
|
Net earnings/(loss)
attributable to Cardinal Health, Inc.
|
$235
million
|
|
$(56)
million
|
|
N.M.
|
|
$852
million
|
|
$330 million
|
|
N.M.
|
Non-GAAP net earnings
attributable to Cardinal Health, Inc.
|
$450
million
|
|
$367 million
|
|
23 %
|
|
$1.9
billion
|
|
$1.5 billion
|
|
21 %
|
Effective Tax
Rate3
|
40.4 %
|
|
160.3 %
|
|
|
|
28.9 %
|
|
50.0 %
|
|
|
Non-GAAP Effective Tax
Rate
|
24.6 %
|
|
29.1 %
|
|
|
|
21.7 %
|
|
22.8 %
|
|
|
Diluted EPS
attributable to Cardinal Health, Inc.
|
$0.96
|
|
$(0.22)
|
|
N.M.
|
|
$3.45
|
|
$1.26
|
|
N.M.
|
Non-GAAP diluted EPS
attributable to Cardinal Health, Inc.
|
$1.84
|
|
$1.43
|
|
29 %
|
|
$7.53
|
|
$5.85
|
|
29 %
|
|
Reflects revised prior
period financials. See footnote 2 below for additional information
regarding the immaterial corrections to results of prior
periods.
|
Segment results2
Pharmaceutical and Specialty Solutions segment
|
Q4
FY24
|
|
Q4 FY23
|
|
Y/Y
|
|
FY24
|
|
FY23
|
|
Y/Y
|
Revenue
|
$55.6
billion
|
|
$49.4
billion
|
|
13 %
|
|
$210.0
billion
|
|
$188.8
billion
|
|
11 %
|
Segment
profit
|
$482
million
|
|
$448 million
|
|
8 %
|
|
$2.0
billion
|
|
$1.9 billion
|
|
7 %
|
Fourth-quarter revenue for the Pharmaceutical and Specialty
Solutions segment increased 13% to $55.6
billion, driven by brand and specialty pharmaceutical sales
growth from existing customers.
Pharmaceutical and Specialty Solutions segment profit increased
8% to $482 million in the fourth
quarter, primarily driven by positive generics program
performance.
Global Medical Products and Distribution
segment
|
Q4
FY24
|
|
Q4 FY23
|
|
Y/Y
|
|
FY24
|
|
FY23
|
|
Y/Y
|
Revenue
|
$3.1
billion
|
|
$3.0 billion
|
|
2 %
|
|
$12.4
billion
|
|
$12.2
billion
|
|
1 %
|
Segment
profit
|
$47
million
|
|
$7 million
|
|
N.M.
|
|
$92
million
|
|
$(147)
million
|
|
N.M.
|
Fourth-quarter revenue for the Global Medical Products and
Distribution segment increased 2% to $3.1
billion, driven by volume growth from existing
customers.
Global Medical Products and Distribution segment profit
increased by $40 million to $47
million in the fourth quarter, driven by an improvement in
net inflationary impacts, including mitigation initiatives.
Other
|
Q4
FY24
|
|
Q4 FY23
|
|
Y/Y
|
|
FY24
|
|
FY23
|
|
Y/Y
|
Revenue
|
$1.2
billion
|
|
$1.0 billion
|
|
15 %
|
|
$4.5
billion
|
|
$4.0 billion
|
|
12 %
|
Segment
profit
|
$111
million
|
|
$100 million
|
|
11 %
|
|
$423
million
|
|
$396 million
|
|
7 %
|
Fourth-quarter revenue for Other increased 15% to $1.2 billion, driven by growth across the three
operating segments: at-Home Solutions, Nuclear and Precision Health
Solutions and OptiFreight Logistics.
Other segment profit increased 11% to $111 million, primarily driven by the performance
of OptiFreight Logistics.
Fiscal year 2025 outlook1
The
company raised its fiscal year 2025 outlook for non-GAAP diluted
EPS to $7.55 to $7.70 from the preliminary outlook of at least
$7.50 previously communicated during
the company's third quarter fiscal year 2024 earnings release. The
company updated its Pharmaceutical and Specialty Solutions segment
profit growth outlook to 1% to 3% growth, from at least 1% growth.
The company also improved its fiscal year 2025 outlooks for
Interest and other, diluted weighted average shares outstanding and
share repurchases4.
Non-GAAP earnings
per share
|
$7.55 to
$7.70
|
Pharmaceutical and
Specialty Solutions segment:
|
|
Revenue
|
4% to 6%
decline5
|
Segment
profit
|
1% to 3%
growth
|
Global Medical
Products and Distribution segment:
|
|
Revenue
|
3% to 5%
growth
|
Segment
profit
|
~$175M
|
Other:
|
|
Revenue
|
10% to 12%
growth
|
Segment
profit
|
~10% growth
|
Interest and
other
|
$140M -
$170M
|
Non-GAAP effective tax
rate
|
23.0% -
24.0%
|
Diluted weighted
average shares outstanding
|
~243M
|
Share
repurchases
|
$750M
|
Capital
Expenditures
|
$500M to
$550M
|
Non-GAAP adjusted free
cash flow
|
~$1.0B6
|
|
Bold indicates a
change to the preliminary FY25 outlook provided in the Q3
FY24 earnings release on May 2, 2024.
|
The company does not provide forward-looking guidance on a GAAP
basis as certain financial information, the probable significance
of which cannot be determined, is not available and cannot be
reasonably estimated. See "Use of Non-GAAP Measures" following the
attached schedules for additional explanation.
Business and portfolio review update
Cardinal Health
provided an update on its business and portfolio review focused on
the Global Medical Products and Distribution segment:
- The company remains committed to maximizing shareholder value
through execution of its GMPD Improvement Plan and reiterated its
fiscal year 2026 target of approximately $300 million in segment profit.
- Additionally, by fiscal year 2026 the company is targeting at
least $500 million in near-term value
creation from GMPD through further simplification actions and
working capital improvements, with the cash to be deployed
according to its disciplined capital allocation framework.
Therefore, the company is raising its share repurchase expectations
in fiscal year 2025 by $250 million
to a total of $750 million.
- As planned, the company's Business Review Committee sunset on
July 15, with ongoing value creation
efforts being overseen by the Board of Directors.
Recent highlights
- Cardinal Health and CVS Health announced a joint venture,
Averon, focused on increasing access for patients to lower cost
specialty pharmaceuticals through the sourcing of biosimilars.
- Cardinal Health announced that it entered into a 5-year
distribution agreement with leading southeast grocery chain,
Publix.
- Cardinal Health announced the opening of its new Advanced
Therapy Solutions Innovation Center, a specialized storage facility
supporting the complex handling requirements of cell and gene
therapies.
- Cardinal Health hosted its 32nd annual Retail
Business Conference, bringing together 5,000 attendees from across
the country to celebrate the critical role its independent pharmacy
customers play in caring for their communities and highlight the
company's innovations and commitment to its customers.
- Cardinal Health announced the opening of its new South Carolina distribution center for its
at-Home Solutions business, featuring the fastest order fulfillment
system in the market. The company also announced the openings of
new GMPD distribution facilities in Massachusetts and Canada.
Upcoming webcasted investor events
- Morgan Stanley 22nd Annual Global Healthcare
Conference at 8:30 a.m. ET,
September 5, 2024
- Baird 2024 Global Healthcare Conference at 9:05 a.m. ET, September
10, 2024
Webcast
Cardinal Health will host a webcast today at
8:30 a.m. Eastern to discuss fourth
quarter and full year results. To access the webcast and
corresponding slide presentation, go to the Investor Relations page
at ir.cardinalhealth.com. No access code is required.
Presentation slides and a webcast replay will be available until
August 14, 2025.
About Cardinal Health
Cardinal Health is a distributor
of pharmaceuticals, a global manufacturer and distributor of
medical and laboratory products, and a provider of performance and
data solutions for health care facilities. With more than 50 years
in business, operations in more than 30 countries and approximately
48,000 employees globally, Cardinal Health is essential to care.
Information about Cardinal Health is available
at cardinalhealth.com.
Contacts
Media: Erich
Timmerman, erich.timmerman@cardinalhealth.com and
614.757.8231
Investors: Matt Sims,
matt.sims@cardinalhealth.com and 614.553.3661
1GAAP refers to U.S. generally accepted accounting
principles. This news release includes GAAP financial measures as
well as non-GAAP financial measures, which are financial measures
not calculated in accordance with GAAP. See "Use of Non-GAAP
Measures" following the attached schedules for definitions of the
non-GAAP financial measures presented in this news release and see
the attached schedules for reconciliations of the differences
between the non-GAAP financial measures and their most directly
comparable GAAP financial measures.
2Cardinal Health revised its prior period financials to
correct an accounting error related to revenue recognition from
third party payors within the at-Home Solutions operating segment.
We evaluated the materiality of the error and determined that the
impacts were not material, individually or in the aggregate, for
any of the prior quarters or annual periods in which they occurred.
In connection with these revisions, the company also corrected the
timing of other unrelated immaterial errors, including an
adjustment to an uncertain tax position, which were previously
recorded in the periods the company identified them. The GAAP
diluted EPS net impact of these prior period revisions is a
$0.01 increase to the 9 months ending
March 31, 2024, a $0.26 increase for fiscal year 2023 and a
$0.02 decrease for fiscal year 2022.
The non-GAAP diluted EPS net impact of these prior period revisions
is a $0.07 increase for the 9 months
ending March 31, 2024, a $0.06 increase for fiscal year 2023 and a
$0.01 increase for fiscal year
2022.
See accompanying schedules below and Notes 1 and 16 of the Notes to
Consolidated Financial Statements included in the company's fiscal
year 2024 Form 10-K for revised financials reflecting the
immaterial corrections to results of prior periods.
3Fluctuations in the GAAP effective tax rates are
primarily due to the impact of goodwill impairments related to GMPD
in each of the fiscal years.
4Updates to preliminary fiscal year 2025 outlook
previously communicated during company's third quarter earnings
release: non-GAAP diluted EPS previously of "At least $7.50", Pharmaceutical and Specialty Solutions
segment profit growth of "At least 1%", Interest and other of
$160M - $190M, diluted weighted average shares
outstanding of 244M – 245M and share repurchases of $500M.
5Reflects $39 billion
revenue headwind due to OptumRx contract expiration, as previously
communicated.
6Reflects one-time unwinding of negative net working
capital related to the OptumRx contract expiration and quarter-end
day of week timing, as previously communicated.
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 Investor Relations
page at ir.cardinalhealth.com. In addition, the website allows
investors and other interested persons to sign up automatically to
receive email alerts when the company posts news releases, SEC
filings and certain other information on its website.
Cautions concerning forward-looking statements
This
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 various accruals and estimates. 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 the risk that we may fail to
achieve our strategic objectives, including the continued execution
of the GMPD Improvement Plan, whether as a result of ongoing
inflationary pressures or our expectations for Cardinal Health
Brand sales; competitive pressures in Cardinal Health's various
lines of business, including the risk that customers may reduce
purchases made under their contracts with us or terminate or not
renew their contracts or the risk that we may fail to offset the
impact of a recent significant customer loss; the performance of
our generics program, including the amount or rate of generic
deflation and our ability to offset generic deflation and maintain
other financial and strategic benefits through our generic sourcing
venture or other components of our generics programs; ongoing risks
associated with the distribution of opioids, including the
financial impact associated with the settlements with governmental
authorities, risks arising from the ongoing Department of Justice
Investigations related to our anti-diversion program, and the risk
that challenges to tax deductions for opioid-related losses could
adversely impact our financial results; risks arising from our
ongoing audits with the IRS, including the risk that the IRS may
disagree with certain positions we have taken, which may result in
an increase to our effective tax rate or other costs; risks
associated with litigation matters, including an Department of
Justice investigation focused on potential violations of the
Anti-Kickback Statute and False Claims Act; our ability to manage
uncertainties associated with the pricing of branded
pharmaceuticals; the possibility that our At-Home unit goodwill
could become impaired due to changes to our long-term financial
plan, increases in global interest rates or unfavorable changes in
the U.S. statutory tax rate. 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. This release reflects management's views as of
August 14, 2024. Except to the extent
required by applicable law, Cardinal Health undertakes no
obligation to update or revise any forward-looking statement.
Forward-looking statements are aspirational and not guarantees or
promises that goals, targets or projections will be met, and no
assurance can be given that any commitment, expectation, initiative
or plan in this report can or will be achieved or completed.
Cardinal Health provides definitions and reconciliations of
non-GAAP financial measures and their most directly comparable GAAP
financial measures at ir.cardinalhealth.com.
Schedule
1
|
Cardinal Health,
Inc. and Subsidiaries
Consolidated
Statements of Earnings/(Loss) (Unaudited)
|
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
(in millions, except
per common share amounts)
|
2024
|
|
2023
|
|
%
Change
|
|
2024
|
|
2023
|
|
%
Change
|
Revenue
|
$
59,867
|
|
$
53,421
|
|
12 %
|
|
$
226,827
|
|
$
204,979
|
|
11 %
|
Cost of products
sold
|
57,985
|
|
51,637
|
|
12 %
|
|
219,413
|
|
198,105
|
|
11 %
|
Gross
margin
|
1,882
|
|
1,784
|
|
5 %
|
|
7,414
|
|
6,874
|
|
8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling,
general and administrative expenses
|
1,277
|
|
1,254
|
|
2 %
|
|
5,000
|
|
4,800
|
|
4 %
|
Restructuring and
employee severance
|
69
|
|
33
|
|
|
|
175
|
|
95
|
|
|
Amortization and other
acquisition-related costs
|
77
|
|
69
|
|
|
|
284
|
|
285
|
|
|
Impairments and
(gain)/loss on disposal of assets, net 1
|
8
|
|
363
|
|
|
|
634
|
|
1,246
|
|
|
Litigation
(recoveries)/charges, net
|
50
|
|
(46)
|
|
|
|
78
|
|
(304)
|
|
|
Operating
earnings/(loss)
|
401
|
|
111
|
|
N.M.
|
|
1,243
|
|
752
|
|
65 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income)/expense,
net
|
1
|
|
6
|
|
|
|
(9)
|
|
5
|
|
|
Interest expense,
net
|
9
|
|
10
|
|
(10) %
|
|
51
|
|
84
|
|
(39) %
|
Earnings before income
taxes
|
391
|
|
95
|
|
N.M.
|
|
1,201
|
|
663
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes 2
|
158
|
|
153
|
|
3 %
|
|
348
|
|
332
|
|
5 %
|
Net
earnings/(loss)
|
233
|
|
(58)
|
|
N.M.
|
|
853
|
|
331
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net
(earnings)/loss attributable to noncontrolling interests
|
2
|
|
2
|
|
|
|
(1)
|
|
(1)
|
|
|
Net earnings/(loss)
attributable to Cardinal Health, Inc.
|
$
235
|
|
$
(56)
|
|
N.M.
|
|
$
852
|
|
$
330
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(Loss) per
common share attributable to Cardinal Health, Inc.:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.96
|
|
$
(0.22)
|
|
N.M.
|
|
$
3.48
|
|
$
1.27
|
|
N.M.
|
Diluted
|
0.96
|
|
(0.22)
|
|
N.M.
|
|
3.45
|
|
1.26
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
244
|
|
254
|
|
|
|
245
|
|
261
|
|
|
Diluted
|
245
|
|
254
|
|
|
|
247
|
|
262
|
|
|
|
In connection with the
preparation of our Consolidated Financial Statements for fiscal
2024, we identified an accounting error related to revenue
recognition from third party payors within the at-Home Solutions
operating segment. We evaluated the materiality of the error and
determined that the impacts were not material, individually or in
the aggregate, to our previously issued Consolidated Financial
Statements for any of the prior quarters or annual periods in which
they occurred. We have revised our prior period
financial statements to correct this error, as well as other
unrelated immaterial errors, including an adjustment to an
uncertain tax position. These revisions impacted each quarter of
fiscal 2022, 2023 and 2024. These other immaterial errors were
previously corrected in the periods they were identified; however,
they are now reflected in the periods they originated. See "Notes
to the Consolidated Financial Statements" included in our Annual
Report on Form 10-K for the fiscal year ended June 30, 2024 to be
filed with the SEC.
|
|
1
Impairments and (gain)/loss on disposals of assets, net includes
pre-tax goodwill impairment charges of $675 million related to the
GMPD segment recorded in fiscal year ended June 30, 2024. During
the three months and fiscal year ended June 30, 2023, impairments
and (gain)/loss on disposals of assets, net included pre-tax
goodwill impairment charges of $364 million and
$1.2 billion related to the GMPD segment,
respectively.
|
2 Provision
for income taxes includes the tax effects relating to the
cumulative goodwill impairment charges. For fiscal 2024 and 2023,
the net tax benefits related to the goodwill impairment charges
were $58 million and $92 million, respectively. The net tax expense
during the three months ended June 30, 2023 related to goodwill
impairment charges was $29 million.
|
Schedule
2
|
Cardinal Health,
Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(in
millions)
|
June 30,
2024
|
|
June 30,
2023
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and
equivalents
|
$
5,133
|
|
$
4,076
|
Trade receivables,
net
|
12,084
|
|
11,108
|
Inventories,
net
|
14,957
|
|
16,119
|
Prepaid expenses and
other
|
2,663
|
|
2,294
|
Assets held for
sale
|
47
|
|
140
|
Total current
assets
|
34,884
|
|
33,737
|
|
|
|
|
Property and equipment,
net
|
2,529
|
|
2,461
|
Goodwill and other
intangibles, net
|
6,450
|
|
6,085
|
Other assets
|
1,258
|
|
1,066
|
Total
assets
|
$
45,121
|
|
$
43,349
|
|
|
|
|
Liabilities and
Shareholders' Deficit
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
31,759
|
|
$
29,934
|
Current portion of
long-term obligations and other short-term borrowings
|
434
|
|
792
|
Other accrued
liabilities
|
3,447
|
|
2,972
|
Liabilities related to
assets held for sale
|
—
|
|
42
|
Total current
liabilities
|
35,640
|
|
33,740
|
|
|
|
|
Long-term obligations,
less current portion
|
4,658
|
|
3,909
|
Deferred income taxes
and other liabilities
|
8,035
|
|
8,657
|
|
|
|
|
Total shareholders'
deficit
|
(3,212)
|
|
(2,957)
|
Total liabilities
and shareholders' deficit
|
$
45,121
|
|
$
43,349
|
|
Amounts have been
revised to reflect the correction of certain unrelated immaterial
misstatements. See "Notes to the Consolidated Financial Statements"
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2024 to be filed with the SEC.
|
Schedule
3
|
Cardinal Health,
Inc. and Subsidiaries
Consolidated
Statements of Cash Flows (Unaudited)
|
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
(in
millions)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net
earnings/(loss)
|
$
233
|
|
$
(58)
|
|
$
853
|
|
331
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net earnings/(loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
186
|
|
176
|
|
710
|
|
692
|
Impairments and loss
on sale of other investments
|
2
|
|
7
|
|
2
|
|
7
|
Impairments and
(gain)/loss on disposal of assets, net
|
8
|
|
363
|
|
634
|
|
1,246
|
Share-based
compensation
|
33
|
|
27
|
|
121
|
|
96
|
Benefit from deferred
income taxes
|
(104)
|
|
(40)
|
|
(104)
|
|
(40)
|
Provision for bad
debts
|
8
|
|
7
|
|
36
|
|
55
|
Change in operating
assets and liabilities, net of effects from acquisitions and
divestitures:
|
|
|
|
|
|
|
|
Increase in
trade receivables
|
(773)
|
|
(397)
|
|
(996)
|
|
(950)
|
(Increase)/decrease in inventories
|
2,373
|
|
567
|
|
1,115
|
|
(412)
|
Increase/(decrease) in accounts
payable
|
(294)
|
|
310
|
|
1,824
|
|
2,816
|
Other accrued
liabilities and operating items, net
|
410
|
|
(91)
|
|
(433)
|
|
(997)
|
Net cash provided by
operating activities
|
2,082
|
|
871
|
|
3,762
|
|
2,844
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Acquisition of
subsidiaries, net of cash acquired
|
2
|
|
—
|
|
(1,190)
|
|
(10)
|
Proceeds from
divestitures, net of cash sold
|
—
|
|
—
|
|
9
|
|
—
|
Additions to property
and equipment
|
(193)
|
|
(217)
|
|
(511)
|
|
(481)
|
Proceeds from disposal
of property and equipment
|
2
|
|
10
|
|
12
|
|
12
|
Purchase of
investments
|
(1)
|
|
(1)
|
|
(4)
|
|
(7)
|
Proceeds from
investments
|
—
|
|
2
|
|
1
|
|
3
|
Proceeds from net
investment hedge terminations
|
6
|
|
—
|
|
34
|
|
29
|
Purchase of short-term
investment in time deposit
|
—
|
|
—
|
|
(550)
|
|
—
|
Proceeds from
short-term investment in time deposit
|
350
|
|
—
|
|
350
|
|
—
|
Net cash provided
by/(used in) investing activities
|
166
|
|
(206)
|
|
(1,849)
|
|
(454)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from long-term
obligations, net of issuance costs
|
—
|
|
—
|
|
1,139
|
|
—
|
Purchase of
noncontrolling interests
|
—
|
|
(3)
|
|
—
|
|
(3)
|
Reduction of long-term
obligations
|
(760)
|
|
(8)
|
|
(783)
|
|
(579)
|
Net tax proceeds from
share-based compensation
|
23
|
|
45
|
|
46
|
|
56
|
Dividends on common
shares
|
(122)
|
|
(126)
|
|
(499)
|
|
(525)
|
Purchase of treasury
shares
|
—
|
|
(500)
|
|
(750)
|
|
(2,000)
|
Net cash used in
financing activities
|
(859)
|
|
(592)
|
|
(847)
|
|
(3,051)
|
|
|
|
|
|
|
|
|
Effect of exchange
rates changes on cash and equivalents
|
(2)
|
|
(7)
|
|
(9)
|
|
(8)
|
|
|
|
|
|
|
|
|
Net increase/(decrease)
in cash and equivalents
|
1,387
|
|
66
|
|
1,057
|
|
(669)
|
Cash and equivalents at
beginning of period
|
3,746
|
|
4,010
|
|
4,076
|
|
4,745
|
Cash and
equivalents at end of period
|
$
5,133
|
|
$
4,076
|
|
$
5,133
|
|
$
4,076
|
|
Amounts have been
revised to reflect the correction of certain unrelated immaterial
misstatements. See "Notes to the Consolidated Financial Statements"
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2024 to be filed with the SEC.
|
Schedule
4
|
Cardinal Health,
Inc. and Subsidiaries
Segment Information
(Unaudited)
|
|
|
Fourth
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical and
Specialty Solutions
|
|
Global Medical
Products and Distribution
|
|
Other
|
(in
millions)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
$
55,608
|
|
$
49,373
|
|
$
3,109
|
|
$
3,047
|
|
$
1,172
|
|
$
1,020
|
Growth rate
|
13 %
|
|
15 %
|
|
2 %
|
|
(2) %
|
|
15 %
|
|
11 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
$
482
|
|
$
448
|
|
$
47
|
|
$
7
|
|
$
111
|
|
$
100
|
Growth rate
|
8 %
|
|
10 %
|
|
N.M.
|
|
N.M.
|
|
11 %
|
|
(7) %
|
Segment profit
margin
|
0.87 %
|
|
0.91 %
|
|
1.51 %
|
|
0.23 %
|
|
9.47 %
|
|
9.80 %
|
|
|
Fiscal
Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceutical and
Specialty Solutions
|
|
Global Medical
Products and Distribution
|
|
Other
|
(in
millions)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
$
210,019
|
|
$
188,814
|
|
$
12,381
|
|
$
12,222
|
|
$
4,512
|
|
$
4,021
|
Growth rate
|
11 %
|
|
15 %
|
|
1 %
|
|
(8) %
|
|
12 %
|
|
14 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
$
2,015
|
|
$
1,881
|
|
$
92
|
|
$
(147)
|
|
$
423
|
|
$
396
|
Growth rate
|
7 %
|
|
14 %
|
|
N.M.
|
|
N.M.
|
|
7 %
|
|
2 %
|
Segment profit
margin
|
0.96 %
|
|
1.00 %
|
|
0.74 %
|
|
(1.20) %
|
|
9.38 %
|
|
9.85 %
|
|
The sum of the
components and certain computations may reflect rounding
adjustments.
|
Amounts have been
revised to reflect the correction of certain unrelated immaterial
misstatements. See "Notes to the Consolidated Financial Statements"
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2024 to be filed with the SEC.
|
Schedule
5
|
Cardinal Health,
Inc. and Subsidiaries
GAAP / Non-GAAP
Reconciliation1
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
|
|
|
|
Operating
|
Earnings
|
|
|
Net
|
|
|
Diluted
|
|
|
Margin
|
|
SG&A2
|
|
Earnings
|
Before
|
Provision
for
|
Net
|
Earnings3
|
Effective
|
|
EPS 3
|
(in millions, except
per common share amounts)
|
Gross
|
Growth
|
|
Growth
|
Operating
|
Growth
|
Income
|
Income
|
Earnings/
|
Growth
|
Tax
|
Diluted
|
Growth
|
Margin
|
Rate
|
SG&A
2
|
Rate
|
Earnings
|
Rate
|
Taxes
|
Taxes
|
(Loss) 3
|
Rate
|
Rate
|
EPS 3,4
|
Rate
|
Fourth Quarter
2024
|
GAAP
|
$
1,882
|
5 %
|
$
1,277
|
2 %
|
$
401
|
N.M.
|
$
391
|
$
158
|
$
235
|
N.M.
|
40.4 %
|
$
0.96
|
N.M.
|
Restructuring and
employee severance
|
—
|
|
—
|
|
69
|
|
69
|
13
|
56
|
|
|
0.23
|
|
Amortization and other
acquisition-related costs
|
—
|
|
—
|
|
77
|
|
77
|
19
|
58
|
|
|
0.24
|
|
Impairments and
(gain)/loss on disposal of assets, net 5
|
—
|
|
—
|
|
8
|
|
8
|
(32)
|
40
|
|
|
0.16
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
50
|
|
50
|
(12)
|
62
|
|
|
0.25
|
|
Non-GAAP
|
$
1,882
|
5 %
|
$
1,277
|
2 %
|
$
605
|
14 %
|
$
595
|
$
147
|
$
450
|
23 %
|
24.6 %
|
$
1.84
|
29 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
2023
|
GAAP
|
$
1,784
|
N.M.
|
$
1,254
|
N.M.
|
$ 111
|
N.M.
|
$
95
|
$
153
|
$
(56)
|
N.M.
|
160.3 %
|
$
(0.22)
|
N.M.
|
Restructuring and
employee severance
|
—
|
|
—
|
|
33
|
|
33
|
7
|
26
|
|
|
0.10
|
|
Amortization and other
acquisition-related costs
|
—
|
|
—
|
|
69
|
|
69
|
18
|
51
|
|
|
0.20
|
|
Impairments and
(gain)/loss on disposal of assets, net 5
|
—
|
|
—
|
|
363
|
|
363
|
(17)
|
380
|
|
|
1.50
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
(46)
|
|
(46)
|
(12)
|
(34)
|
|
|
(0.14)
|
|
Non-GAAP
|
$
1,784
|
N.M.
|
$
1,254
|
N.M.
|
$ 530
|
N.M.
|
$ 514
|
$
149
|
$
367
|
N.M.
|
29.1 %
|
$
1.43
|
N.M.
|
|
1 For more
information on these measures, refer to the Use of Non-GAAP
Measures and Definitions schedules.
|
2
Distribution, selling, general and administrative expenses.
|
3
Attributable to Cardinal Health, Inc.
|
4 For the
three months ended June 30, 2023, GAAP diluted loss per share
attributable to Cardinal Health, Inc. ("GAAP diluted EPS") and the
EPS impact from the GAAP to non-GAAP per share reconciling items
are calculated using a weighted average of 254 million common
shares, which excludes potentially dilutive securities from the
denominator due to their anti-dilutive effects resulting from our
GAAP net loss for the period. For the three months ended June 30,
2023, non-GAAP diluted EPS is calculated using a weighted average
of 256 million common shares, which includes potentially dilutive
shares.
|
5 During
fiscal 2024, we recorded cumulative pre-tax goodwill impairment
charges of $675 million related to GMPD in impairments and
(gain)/loss on disposal of assets, net. The estimated net tax
benefit related to the impairments is $58 million and is
included in the annual effective tax rate. During the three months
ended June 30, 2024, the amount of tax expense recognized related
to goodwill impairment charges was $34 million, which reflects the
reversal of the incremental tax benefit recognized during the nine
months ended March 31, 2024.
|
|
Impairments and
(gain)/loss on disposals of assets, net included a pre-tax goodwill
impairment charge of $364 million related to GMPD recorded during
the three months ended June 30, 2023. The net tax expense
recognized during the three months ended June 30, 2023 related to
goodwill impairment charges was $29 million, which included a
reversal of the incremental tax benefit recognized during the nine
months ended March 31, 2023.
|
|
The sum of the
components and certain computations may reflect rounding
adjustments.
|
|
We generally apply
varying tax rates depending on the item's nature and tax
jurisdiction where it is incurred.
|
|
Amounts have been
revised to reflect the correction of certain unrelated immaterial
misstatements. See "Notes to the Consolidated Financial Statements"
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2024 to be filed with the SEC.
|
Schedule
5
|
Cardinal Health,
Inc. and Subsidiaries
GAAP / Non-GAAP
Reconciliation1
(Unaudited)
|
|
|
|
|
|
|
|
|
Earnings/
|
|
|
|
|
|
|
|
|
Gross
|
|
|
|
Operating
|
(Loss)
|
Provision
|
|
Net
|
|
|
Diluted
|
|
|
Margin
|
|
SG&A2
|
Operating
|
Earnings
|
Before
|
for
|
Net
|
Earnings3
|
Effective
|
|
EPS 3
|
|
Gross
|
Growth
|
|
Growth
|
Earnings/
|
Growth
|
Income
|
Income
|
Earnings/
|
Growth
|
Tax
|
Diluted
|
Growth
|
(in millions, except
per common share amounts)
|
Margin
|
Rate
|
SG&A
2
|
Rate
|
(Loss)
|
Rate
|
Taxes
|
Taxes
|
(Loss) 3
|
Rate
|
Rate
|
EPS 3,4
|
Rate
|
Fiscal Year
2024
|
GAAP
|
$
7,414
|
8 %
|
$
5,000
|
4 %
|
$ 1,243
|
65 %
|
$
1,201
|
$
348
|
$
852
|
N.M.
|
28.9 %
|
$
3.45
|
N.M.
|
Shareholder cooperation
agreement costs
|
—
|
|
(1)
|
|
1
|
|
1
|
—
|
1
|
|
|
—
|
|
Restructuring and
employee severance
|
—
|
|
—
|
|
175
|
|
175
|
41
|
134
|
|
|
0.54
|
|
Amortization and other
acquisition-related costs
|
—
|
|
—
|
|
284
|
|
284
|
74
|
210
|
|
|
0.85
|
|
Impairments and
(gain)/loss on disposal of assets, net 5
|
—
|
|
—
|
|
634
|
|
634
|
47
|
587
|
|
|
2.38
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
78
|
|
78
|
5
|
73
|
|
|
0.30
|
|
Non-GAAP
|
$
7,414
|
8 %
|
$
5,000
|
4 %
|
$ 2,414
|
16 %
|
$
2,372
|
$
515
|
$
1,856
|
21 %
|
21.7 %
|
$
7.53
|
29 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
2023
|
GAAP
|
$ 6,874
|
6 %
|
$
4,800
|
6 %
|
$ 752
|
N.M.
|
$ 663
|
$ 332
|
$ 330
|
N.M.
|
50.0 %
|
$
1.26
|
N.M.
|
State opioid assessment
related to prior fiscal years
|
—
|
|
6
|
|
(6)
|
|
(6)
|
(2)
|
(4)
|
|
|
(0.02)
|
|
Shareholder cooperation
agreement costs
|
|
|
(8)
|
|
8
|
|
8
|
2
|
6
|
|
|
0.02
|
|
Restructuring and
employee severance
|
—
|
|
—
|
|
95
|
|
95
|
21
|
74
|
|
|
0.28
|
|
Amortization and other
acquisition-related costs
|
—
|
|
—
|
|
285
|
|
285
|
74
|
211
|
|
|
0.80
|
|
Impairments and
(gain)/loss on disposal of assets, net 5
|
—
|
|
—
|
|
1,246
|
|
1,246
|
108
|
1,138
|
|
|
4.35
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
(304)
|
|
(304)
|
(83)
|
(221)
|
|
|
(0.84)
|
|
Non-GAAP
|
$ 6,874
|
6 %
|
$
4,798
|
6 %
|
$ 2,076
|
5 %
|
$
1,987
|
$ 452
|
$
1,534
|
8 %
|
22.8 %
|
$
5.85
|
15 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
2022
|
GAAP
|
$ 6,484
|
N.M.
|
$
4,512
|
N.M.
|
$ (607)
|
N.M.
|
$ (784)
|
$ 153
|
$ (938)
|
N.M.
|
(19.5) %
|
$
(3.37)
|
N.M.
|
Restructuring and
employee severance
|
—
|
|
—
|
|
101
|
|
101
|
26
|
75
|
|
|
0.27
|
|
Amortization and other
acquisition-related costs
|
—
|
|
—
|
|
324
|
|
324
|
84
|
240
|
|
|
0.87
|
|
Impairments and
(gain)/loss on disposal of assets, net 5
|
—
|
|
—
|
|
2,060
|
|
2,060
|
98
|
1,962
|
|
|
7.03
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
94
|
|
94
|
17
|
77
|
|
|
0.28
|
|
Loss on early
extinguishment of debt
|
—
|
|
—
|
|
—
|
|
10
|
3
|
7
|
|
|
0.03
|
|
Gain on sale of equity
interest in naviHealth investment
|
—
|
|
—
|
|
—
|
|
(2)
|
—
|
(2)
|
|
|
—
|
|
Non-GAAP
|
$ 6,485
|
N.M.
|
$
4,512
|
N.M.
|
$ 1,973
|
N.M.
|
$
1,804
|
$ 381
|
$
1,422
|
N.M.
|
21.1 %
|
$
5.07
|
N.M.
|
|
1 For more
information on these measures, refer to the Use of Non-GAAP
Measures and Definitions schedules.
|
2
Distribution, selling, general and administrative expenses.
|
3
Attributable to Cardinal Health, Inc.
|
4 For fiscal
2022, GAAP diluted loss per share attributable to Cardinal Health,
Inc. and the EPS impact from the GAAP to non-GAAP per share
reconciling items are calculated using a weighted average of 279
million common shares, which excludes potentially dilutive
securities from the denominator due to their anti dilutive effects
resulting from our GAAP net loss for the period. Fiscal 2022
non-GAAP diluted EPS is calculated using a weighted average of 280
million common shares, which includes potentially dilutive
shares.
|
5 For fiscal
2024, 2023 and 2022, impairments and (gain)/loss on disposals of
assets, net includes pre-tax goodwill impairment charges of $675
million, $1.2 billion and $2.1 billion related to the GMPD segment,
respectively. For fiscal 2024, 2023 and 2022, the net tax benefit
related to these charges was $58 million, $92 million and
$140 million, respectively, and were included in the annual
effective tax rate.
|
|
The sum of the
components and certain computations may reflect rounding
adjustments.
|
|
We generally apply
varying tax rates depending on the item's nature and tax
jurisdiction where it is incurred.
|
|
Amounts have been
revised to reflect the correction of certain unrelated immaterial
misstatements. See "Notes to the Consolidated Financial Statements"
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2024 to be filed with the SEC.
|
Schedule
6
|
Cardinal Health,
Inc. and Subsidiaries
GAAP / Non-GAAP
Reconciliation - GAAP Cash Flow to Non-GAAP Adjusted Free Cash Flow
(Unaudited)
|
|
|
Fiscal
Year
|
|
Fiscal Year
|
(in
millions)
|
2024
|
|
2023
|
GAAP - Cash Flow
Categories
|
|
|
|
Net cash provided by
operating activities
|
$
3,762
|
|
$
2,844
|
Net cash provided
by/(used in) investing activities
|
(1,849)
|
|
(454)
|
Net cash used in
financing activities
|
(847)
|
|
(3,051)
|
Effect of exchange
rates changes on cash and equivalents
|
(9)
|
|
(8)
|
Net increase/(decrease)
in cash and equivalents
|
$
1,057
|
|
$
(669)
|
|
|
|
|
Non-GAAP Adjusted
Free Cash Flow
|
|
|
|
Net cash provided by
operating activities
|
$
3,762
|
|
$
2,844
|
Additions to property
and equipment
|
(511)
|
|
(481)
|
Payments related to
matters included in litigation (recoveries)/charges, net
|
691
|
|
490
|
|
|
|
|
Non-GAAP Adjusted Free
Cash Flow
|
$
3,942
|
|
$
2,853
|
|
For more information on
these measures, refer to the Use of Non-GAAP Measures and
Definitions schedules.
|
Amounts have been
revised to reflect the correction of certain unrelated immaterial
misstatements. See "Notes to the Consolidated Financial Statements"
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2024 to be filed with the SEC.
|
Schedule
7
|
Cardinal Health,
Inc. and Subsidiaries
Segment Information
by Quarter (Unaudited)
|
|
|
Fiscal Year
2024
|
(in
millions)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
Segment
Revenue
|
|
|
|
|
|
|
|
|
|
Pharmaceutical and
Specialty Solutions
|
$
50,588
|
|
$
53,202
|
|
$
50,622
|
|
$
55,608
|
|
$ 210,019
|
Growth Rate
|
11 %
|
|
12 %
|
|
9 %
|
|
13 %
|
|
11 %
|
Global Medical
Products and Distribution
|
3,032
|
|
3,127
|
|
3,113
|
|
3,109
|
|
12,381
|
Growth Rate
|
(2) %
|
|
2 %
|
|
3 %
|
|
2 %
|
|
1 %
|
Other
|
1,051
|
|
1,135
|
|
1,154
|
|
1,172
|
|
4,512
|
Growth Rate
|
9 %
|
|
11 %
|
|
14 %
|
|
15 %
|
|
12 %
|
Total Segment
Revenue 1
|
$
54,671
|
|
$
57,464
|
|
$
54,889
|
|
$
59,889
|
|
$ 226,912
|
Growth Rate
|
10 %
|
|
12 %
|
|
9 %
|
|
12 %
|
|
11 %
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
Segment
Profit
|
|
|
|
|
|
|
|
|
|
Pharmaceutical and
Specialty Solutions
|
$
456
|
|
$
495
|
|
$
582
|
|
$
482
|
|
$
2,015
|
Growth Rate
|
14 %
|
|
10 %
|
|
— %
|
|
8 %
|
|
7 %
|
Global Medical
Products and Distribution
|
12
|
|
11
|
|
22
|
|
47
|
|
92
|
Growth Rate
|
N.M.
|
|
N.M.
|
|
N.M.
|
|
N.M.
|
|
N.M.
|
Other
|
96
|
|
106
|
|
110
|
|
111
|
|
423
|
Growth Rate
|
(3) %
|
|
10 %
|
|
9 %
|
|
11 %
|
|
7 %
|
Total Segment
Profit 1
|
$
564
|
|
$
612
|
|
$
714
|
|
$
640
|
|
$
2,530
|
Growth Rate
|
38 %
|
|
19 %
|
|
10 %
|
|
15 %
|
|
19 %
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
2023
|
(in
millions)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
Segment
Revenue
|
|
|
|
|
|
|
|
|
|
Pharmaceutical and
Specialty Solutions
|
$
45,558
|
|
$
47,383
|
|
$
46,500
|
|
$
49,373
|
|
$ 188,814
|
Growth Rate
|
15 %
|
|
15 %
|
|
14 %
|
|
15 %
|
|
15 %
|
Global Medical
Products and Distribution
|
3,085
|
|
3,078
|
|
3,012
|
|
3,047
|
|
12,222
|
Growth Rate
|
(13) %
|
|
(9) %
|
|
(7) %
|
|
(2) %
|
|
(8) %
|
Other
|
968
|
|
1,024
|
|
1,009
|
|
1,020
|
|
4,021
|
Growth Rate
|
17 %
|
|
13 %
|
|
17 %
|
|
11 %
|
|
14 %
|
Total Segment
Revenue 1
|
$
49,611
|
|
$
51,485
|
|
$
50,521
|
|
$
53,440
|
|
$ 205,057
|
Growth Rate
|
13 %
|
|
13 %
|
|
13 %
|
|
13 %
|
|
13 %
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
Segment
Profit
|
|
|
|
|
|
|
|
|
|
Pharmaceutical and
Specialty Solutions
|
$
399
|
|
$
451
|
|
$
583
|
|
$
448
|
|
$
1,881
|
Growth Rate
|
5 %
|
|
14 %
|
|
26 %
|
|
10 %
|
|
14 %
|
Global Medical
Products and Distribution
|
(89)
|
|
(33)
|
|
(32)
|
|
7
|
|
(147)
|
Growth Rate
|
N.M.
|
|
N.M.
|
|
N.M.
|
|
N.M.
|
|
N.M.
|
Other
|
99
|
|
96
|
|
101
|
|
100
|
|
396
|
Growth Rate
|
5 %
|
|
(9) %
|
|
22 %
|
|
(7) %
|
|
2 %
|
Total Segment
Profit 1
|
$
409
|
|
$
514
|
|
$
652
|
|
$
555
|
|
$
2,130
|
Growth Rate
|
(21) %
|
|
6 %
|
|
23 %
|
|
28 %
|
|
8 %
|
|
1 These
totals do not include certain items recorded in Corporate which are
not allocated to the segments.
|
Amounts have been
revised to reflect the correction of certain unrelated immaterial
misstatements. See "Notes to the Consolidated Financial Statements"
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2024 to be filed with the SEC.
|
Schedule
7
|
Cardinal Health,
Inc. and Subsidiaries
Segment Information
by Quarter (Unaudited)
|
|
|
Fiscal Year
2022
|
(in
millions)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
Segment
Revenue
|
|
|
|
|
|
|
|
|
|
Pharmaceutical and
Specialty Solutions
|
$
39,620
|
|
$
41,171
|
|
$
40,728
|
|
$
43,077
|
|
$
164,596
|
Global Medical
Products and Distribution
|
3,531
|
|
3,399
|
|
3,236
|
|
3,114
|
|
13,280
|
Other
|
829
|
|
903
|
|
866
|
|
920
|
|
3,518
|
Total Segment
Revenue 1
|
$
43,980
|
|
$
45,473
|
|
$
44,830
|
|
$
47,111
|
|
$
181,394
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
Segment
Profit
|
|
|
|
|
|
|
|
|
|
Pharmaceutical and
Specialty Solutions
|
$
379
|
|
$
397
|
|
$
461
|
|
$
406
|
|
$
1,643
|
Global Medical
Products and Distribution
|
46
|
|
(18)
|
|
(12)
|
|
(80)
|
|
(64)
|
Other
|
94
|
|
106
|
|
83
|
|
107
|
|
390
|
Total Segment
Profit 1
|
$
519
|
|
$
485
|
|
$
532
|
|
$
433
|
|
$
1,969
|
|
1 These
totals do not include certain items recorded in Corporate which are
not allocated to the segments.
|
Amounts have been
revised to reflect the correction of certain unrelated immaterial
misstatements. See "Notes to the Consolidated Financial Statements"
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2024 to be filed with the SEC.
|
Schedule
8
|
Cardinal Health,
Inc. and Subsidiaries
Supplemental
Information (Unaudited)
|
|
|
Fiscal Year
2024
|
(in millions, except
per common share amounts)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
GAAP
|
|
|
|
|
|
|
|
|
|
Revenue
|
$ 54,650
|
|
$ 57,442
|
|
$ 54,868
|
|
$ 59,867
|
|
$ 226,827
|
Operating
Earnings/(Loss)
|
(32)
|
|
505
|
|
369
|
|
401
|
|
1,243
|
Earnings/(loss) before
income taxes
|
(44)
|
|
512
|
|
342
|
|
391
|
|
1,201
|
Net earnings/(loss)
attributable to Cardinal Health, Inc.
|
(12)
|
|
368
|
|
261
|
|
235
|
|
852
|
Effective Tax
Rate
|
75.1 %
|
|
27.9 %
|
|
23.3 %
|
|
40.4 %
|
|
28.9 %
|
Diluted
Earnings/(Loss) per common share attributable to Cardinal Health,
Inc.
|
$
(0.05)
|
|
$
1.50
|
|
$
1.07
|
|
$
0.96
|
|
$
3.45
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
Operating
Earnings
|
$
557
|
|
$
585
|
|
$
667
|
|
$
605
|
|
$
2,414
|
Earnings before income
taxes
|
545
|
|
592
|
|
640
|
|
595
|
|
2,372
|
Net earnings
attributable to Cardinal Health, Inc.
|
430
|
|
464
|
|
511
|
|
450
|
|
1,856
|
Effective Tax
Rate
|
20.9 %
|
|
21.4 %
|
|
19.9 %
|
|
24.6 %
|
|
21.7 %
|
Diluted Earnings per
common share attributable to Cardinal Health, Inc.
|
$
1.72
|
|
$
1.89
|
|
$
2.09
|
|
$
1.84
|
|
$
7.53
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
2023
|
(in millions, except
per common share amounts)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
GAAP
|
|
|
|
|
|
|
|
|
|
Revenue
|
$ 49,592
|
|
$ 51,468
|
|
$ 50,498
|
|
$ 53,421
|
|
$ 204,979
|
Operating
Earnings/(Loss)
|
123
|
|
(86)
|
|
604
|
|
111
|
|
752
|
Earnings/(loss) before
income taxes
|
96
|
|
(104)
|
|
576
|
|
95
|
|
663
|
Net earnings/(loss)
attributable to Cardinal Health, Inc.
|
98
|
|
(77)
|
|
365
|
|
(56)
|
|
330
|
Effective Tax
Rate
|
(2.4) %
|
|
27.5 %
|
|
36.5 %
|
|
160.3 %
|
|
50.0 %
|
Diluted
Earnings/(Loss) per common share attributable to Cardinal Health,
Inc.
|
$
0.36
|
|
$
(0.30)
|
|
$
1.41
|
|
$
(0.22)
|
|
$
1.26
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Full Year
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
Operating
Earnings
|
$
407
|
|
$
501
|
|
$
638
|
|
$
530
|
|
$
2,076
|
Earnings before income
taxes
|
380
|
|
483
|
|
610
|
|
514
|
|
1,987
|
Net earnings
attributable to Cardinal Health, Inc.
|
315
|
|
379
|
|
472
|
|
367
|
|
1,534
|
Effective Tax
Rate
|
16.7 %
|
|
21.2 %
|
|
22.5 %
|
|
29.1 %
|
|
22.8 %
|
Diluted Earnings per
common share attributable to Cardinal Health, Inc.
|
$
1.15
|
|
$
1.44
|
|
$
1.83
|
|
$
1.43
|
|
$
5.85
|
|
The sum of the
components and certain computations may reflect rounding
adjustments.
|
|
See "Use of Non-GAAP
Measures" following the attached schedules for definitions of the
non-GAAP financial measures presented in these tables and see the
attached schedules for reconciliations of the differences between
the non-GAAP financial measures and their most directly comparable
GAAP financial measures.
|
|
Amounts have been
revised to reflect the correction of certain unrelated immaterial
misstatements. See "Notes to the Consolidated Financial Statements"
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2024 to be filed with the SEC.
|
Schedule
9
|
Cardinal Health,
Inc. and Subsidiaries
GAAP / Non-GAAP
Reconciliation1
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
|
|
|
|
Operating
|
Earnings
|
|
|
Net
|
|
|
Diluted
|
|
|
Margin
|
|
SG&A2
|
|
Earnings
|
Before
|
Provision
for
|
|
Earnings3
|
Effective
|
|
EPS 3
|
(in millions, except
per common share amounts)
|
Gross
|
Growth
|
|
Growth
|
Operating
|
Growth
|
Income
|
Income
|
Net
|
Growth
|
Tax
|
Diluted
|
Growth
|
Margin
|
Rate
|
SG&A
2
|
Rate
|
Earnings
|
Rate
|
Taxes
|
Taxes
|
Earnings
3
|
Rate
|
Rate
|
EPS 3
|
Rate
|
Third Quarter
2024
|
GAAP
|
$
1,935
|
7 %
|
$
1,269
|
8 %
|
$
369
|
(39) %
|
$
342
|
$
80
|
$
261
|
(28) %
|
23.3 %
|
$
1.07
|
(24) %
|
Shareholder cooperation
agreement costs
|
—
|
|
(1)
|
|
1
|
|
1
|
—
|
1
|
|
|
—
|
|
Restructuring and
employee severance
|
—
|
|
—
|
|
53
|
|
53
|
14
|
39
|
|
|
0.16
|
|
Amortization and other
acquisition-related costs
|
—
|
|
—
|
|
80
|
|
80
|
21
|
59
|
|
|
0.24
|
|
Impairments and
(gain)/loss on disposal of assets, net 4
|
—
|
|
—
|
|
84
|
|
84
|
(21)
|
105
|
|
|
0.44
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
80
|
|
80
|
34
|
46
|
|
|
0.18
|
|
Non-GAAP
|
$
1,935
|
7 %
|
$
1,268
|
8 %
|
$
667
|
5 %
|
$
640
|
$
128
|
$
511
|
8 %
|
19.9 %
|
$
2.09
|
14 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
2023
|
GAAP
|
$
1,810
|
N.M.
|
$
1,172
|
N.M.
|
$ 604
|
N.M.
|
$ 576
|
$
209
|
$
365
|
N.M.
|
36.5 %
|
$
1.41
|
N.M.
|
Restructuring and
employee severance
|
—
|
|
—
|
|
16
|
|
16
|
4
|
12
|
|
|
0.05
|
|
Amortization and other
acquisition-related costs
|
—
|
|
—
|
|
74
|
|
74
|
19
|
55
|
|
|
0.21
|
|
Impairments and
(gain)/loss on disposal of assets, net 4
|
—
|
|
—
|
|
20
|
|
20
|
(74)
|
94
|
|
|
0.36
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
(76)
|
|
(76)
|
(22)
|
(54)
|
|
|
(0.21)
|
|
Non-GAAP
|
$
1,810
|
N.M.
|
$
1,172
|
N.M.
|
$ 638
|
N.M.
|
$ 610
|
$
136
|
$
472
|
N.M.
|
22.5 %
|
$
1.83
|
N.M.
|
|
1 For more
information on these measures, refer to the Use of Non-GAAP
Measures and Definitions schedules.
|
2
Distribution, selling, general and administrative expenses.
|
3
Attributable to Cardinal Health, Inc.
|
4 For the
three months ended March 31, 2024, impairments and (gain)/loss on
disposal of assets, net includes a pre-tax goodwill impairment
charge of $90 million related to GMPD. For fiscal 2024, the
estimated net tax benefit related to the impairments is
$58 million and is included in the annual effective tax rate.
As a result, the amount of tax expense recognized increased
approximately by an incremental $30 million during the three months
ended March 31, 2024.
|
|
For the nine months
ended March 31, 2023, impairments and (gain)/loss on disposal of
assets, net included pre-tax impairment charges of $863 million
related to GMPD. For fiscal 2023, the estimated net tax benefit
related to the impairment was included in the annual effective tax
rate. As a result, the amount of tax expense recognized increased
approximately by an incremental $79 million during the three months
ended March 31, 2023.
|
|
The sum of the
components and certain computations may reflect rounding
adjustments.
|
|
We generally apply
varying tax rates depending on the item's nature and tax
jurisdiction where it is incurred.
|
|
Amounts have been
revised to reflect the correction of certain unrelated immaterial
misstatements. See "Notes to the Consolidated Financial Statements"
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2024 to be filed with the SEC.
|
Schedule
9
|
Cardinal Health,
Inc. and Subsidiaries
GAAP / Non-GAAP
Reconciliation1
(Unaudited)
|
|
|
|
|
|
|
|
|
Earnings/
|
|
|
|
|
|
|
|
|
Gross
|
|
|
|
Operating
|
(Loss)
|
Provision
for/
|
|
Net
|
|
|
Diluted
|
|
|
Margin
|
|
SG&A2
|
Operating
|
Earnings
|
Before
|
(Benefit
from)
|
Net
|
Earnings3
|
Effective
|
|
EPS 3
|
(in millions, except
per common share amounts)
|
Gross
|
Growth
|
|
Growth
|
Earnings/
|
Growth
|
Income
|
Income
|
Earnings/
|
Growth
|
Tax
|
Diluted
|
Growth
|
Margin
|
Rate
|
SG&A
2
|
Rate
|
(Loss)
|
Rate
|
Taxes
|
Taxes
|
(Loss) 3
|
Rate
|
Rate
|
EPS 3,4
|
Rate
|
Second Quarter
2024
|
GAAP
|
$
1,854
|
10 %
|
$
1,268
|
8 %
|
$
505
|
N.M.
|
$
512
|
$
143
|
$
368
|
N.M.
|
27.9 %
|
$
1.50
|
N.M.
|
Shareholder cooperation
agreement costs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
Restructuring and
employee severance
|
—
|
|
—
|
|
28
|
|
28
|
7
|
21
|
|
|
0.09
|
|
Amortization and other
acquisition-related costs
|
—
|
|
—
|
|
63
|
|
63
|
17
|
46
|
|
|
0.19
|
|
Impairments and
(gain)/loss on disposal of assets, net 5
|
—
|
|
—
|
|
1
|
|
1
|
(35)
|
36
|
|
|
0.15
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
(11)
|
|
(11)
|
(5)
|
(6)
|
|
|
(0.03)
|
|
Non-GAAP
|
$
1,854
|
10 %
|
$
1,269
|
7 %
|
$
585
|
17 %
|
$
592
|
$
127
|
$
464
|
22 %
|
21.4 %
|
$
1.89
|
31 %
|
|
Second Quarter
2023
|
GAAP
|
$
1,684
|
N.M.
|
$
1,179
|
N.M.
|
$ (86)
|
N.M.
|
$ (104)
|
$
(27)
|
$
(77)
|
N.M.
|
27.5 %
|
$
(0.30)
|
N.M.
|
State Opioid assessment
related to prior fiscal years
|
—
|
|
6
|
|
(6)
|
|
(6)
|
(2)
|
(4)
|
|
|
(0.02)
|
|
Shareholder cooperation
agreement costs
|
—
|
|
(2)
|
|
2
|
|
2
|
1
|
1
|
|
|
0.01
|
|
Restructuring and
employee severance
|
—
|
|
—
|
|
17
|
|
17
|
4
|
13
|
|
|
0.05
|
|
Amortization and other
acquisition-related costs
|
—
|
|
—
|
|
71
|
|
71
|
18
|
53
|
|
|
0.20
|
|
Impairments and
(gain)/loss on disposal of assets, net 5
|
—
|
|
—
|
|
710
|
|
710
|
166
|
544
|
|
|
2.08
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
(207)
|
|
(207)
|
(56)
|
(151)
|
|
|
(0.58)
|
|
Non-GAAP
|
$
1,684
|
N.M.
|
$
1,183
|
N.M.
|
$ 501
|
N.M.
|
$ 483
|
$
104
|
$
379
|
N.M.
|
21.2 %
|
$
1.44
|
N.M.
|
|
1 For
more information on these measures, refer to the Use of Non-GAAP
Measures and Definitions schedules.
|
2
Distribution, selling, general and administrative expenses.
|
3
Attributable to Cardinal Health, Inc.
|
4 For the
three months ended December 31, 2022, GAAP diluted EPS and the EPS
impact from the GAAP to non-GAAP per share reconciling items are
calculated using a weighted average of 261 million common shares,
which excludes potentially dilutive securities from the denominator
due to their anti-dilutive effects resulting from our GAAP net loss
for the periods. For the three months ended December 31, 2022,
non-GAAP diluted EPS is calculated using a weighted average of 263
million common shares, which includes potentially dilutive
shares.
|
5 For the
six months ended December 31, 2023, we recognized a pre-tax
goodwill impairment charge of $585 million related to GMPD in
impairments and (gain)/loss on disposal of assets, net. For fiscal
2024, the net tax benefit related to this impairment charge was
included in the annual effective tax rate. As a result, the amount
of tax benefit increased approximately by an incremental $36
million for the three months ended December 31, 2023 and increased
the provision for income taxes for the remainder of fiscal
2024.
|
|
For the three months
ended December 31, 2022, impairments and (gain)/loss on disposal of
assets, net included a pre-tax goodwill impairment charge of $709
million related to GMPD. For fiscal 2023, the net tax benefit
related to the cumulative impairment charges was included in the
annual effective tax rate. As a result, the amount of tax benefit
increased approximately by an incremental $114 million for the
three months ended December 31, 2022 and increased the provision
for income taxes for the remainder of fiscal 2023.
|
|
The sum of the
components and certain computations may reflect rounding
adjustments.
|
|
We generally apply
varying tax rates depending on the item's nature and tax
jurisdiction where it is incurred.
|
|
Amounts have been
revised to reflect the correction of certain unrelated immaterial
misstatements. See "Notes to the Consolidated Financial Statements"
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2024 to be filed with the SEC.
|
Schedule
9
|
Cardinal Health,
Inc. and Subsidiaries
GAAP / Non-GAAP
Reconciliation1
(Unaudited)
|
|
|
|
|
|
|
|
|
Earnings/
|
|
|
|
|
|
|
|
|
Gross
|
|
|
|
Operating
|
(Loss)
|
Provision
for/
|
|
Net
|
|
|
Diluted
|
|
|
Margin
|
|
SG&A2
|
Operating
|
Earnings
|
Before
|
(Benefit
from)
|
Net
|
Earnings3
|
Effective
|
|
EPS 3
|
(in millions, except
per common share amounts)
|
Gross
|
Growth
|
|
Growth
|
Earnings/
|
Growth
|
Income
|
Income
|
Earnings/
|
Growth
|
Tax
|
Diluted
|
Growth
|
Margin
|
Rate
|
SG&A
2
|
Rate
|
(Loss)
|
Rate
|
Taxes
|
Taxes
|
(Loss) 3
|
Rate
|
Rate
|
EPS 3,4
|
Rate
|
First Quarter
2024
|
GAAP
|
$
1,743
|
9 %
|
$
1,186
|
(1) %
|
$
(32)
|
N.M.
|
$
(44)
|
$
(33)
|
$
(12)
|
N.M.
|
75.1 %
|
$
(0.05)
|
N.M.
|
Shareholder cooperation
agreement costs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
Restructuring and
employee severance
|
—
|
|
—
|
|
25
|
|
25
|
7
|
18
|
|
|
0.07
|
|
Amortization and other
acquisition-related costs
|
—
|
|
—
|
|
64
|
|
64
|
17
|
47
|
|
|
0.19
|
|
Impairments and
(gain)/loss on disposal of assets, net 5
|
—
|
|
—
|
|
541
|
|
541
|
135
|
406
|
|
|
1.63
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
(41)
|
|
(41)
|
(12)
|
(29)
|
|
|
(0.12)
|
|
Non-GAAP
|
$
1,743
|
9 %
|
$
1,186
|
— %
|
$
557
|
37 %
|
$
545
|
$
114
|
$
430
|
37 %
|
20.9 %
|
$
1.72
|
50 %
|
|
First Quarter
2023
|
GAAP
|
$
1,596
|
N.M.
|
$
1,195
|
N.M.
|
$ 123
|
N.M.
|
$
96
|
$
(3)
|
$
98
|
N.M.
|
(2.4) %
|
$
0.36
|
N.M.
|
Shareholder cooperation
agreement costs
|
—
|
|
(6)
|
|
6
|
|
6
|
2
|
4
|
|
|
0.01
|
|
Restructuring and
employee severance
|
—
|
|
—
|
|
29
|
|
29
|
7
|
22
|
|
|
0.08
|
|
Amortization and other
acquisition-related costs
|
—
|
|
—
|
|
71
|
|
71
|
18
|
53
|
|
|
0.20
|
|
Impairments and
(gain)/loss on disposal of assets, net 5
|
—
|
|
—
|
|
153
|
|
153
|
33
|
120
|
|
|
0.44
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
25
|
|
25
|
7
|
18
|
|
|
0.06
|
|
Non-GAAP
|
$
1,596
|
N.M.
|
$
1,189
|
N.M.
|
$ 407
|
N.M.
|
$ 380
|
$
64
|
$
315
|
N.M.
|
16.7 %
|
$
1.15
|
N.M.
|
|
1 For more
information on these measures, refer to the Use of Non-GAAP
Measures and Definitions schedules.
|
2
Distribution, selling, general and administrative expenses.
|
3
Attributable to Cardinal Health, Inc.4 For the
three months ended September 30, 2023, GAAP diluted EPS and the EPS
impact from the GAAP to non-GAAP per share reconciling items are
calculated using a weighted average of 249 million common shares,
which excludes potentially dilutive securities from the denominator
due to their anti-dilutive effects resulting from our GAAP net loss
for the periods. For the three months ended September 30, 2023,
non-GAAP diluted EPS is calculated using a weighted average of 250
million common shares, which includes potentially dilutive
shares.
|
5 For the
three months ended September 30, 2023 and 2022, impairments and
(gain)/loss on disposals of assets, net includes pre-tax goodwill
impairment charges of $585 million and $154 million, respectively,
related to GMPD. For fiscal 2024 and 2023, the estimated net tax
benefits related to these impairment charges were included in the
annual effective tax rate. As a result, the tax benefits for the
three months ended September 30, 2023 and 2022 increased
approximately by an incremental $102 million and $24 million,
respectively, and increased the provision for income taxes during
the remainder of fiscal 2024 and 2023, respectively.
|
|
The sum of the
components and certain computations may reflect rounding
adjustments.
|
|
We generally apply
varying tax rates depending on the item's nature and tax
jurisdiction where it is incurred.
|
|
Amounts have been
revised to reflect the correction of certain unrelated immaterial
misstatements. See "Notes to the Consolidated Financial Statements"
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2024 to be filed with the SEC.
|
Cardinal Health, Inc. and Subsidiaries
Use of Non-GAAP Measures
This earnings release
contains financial measures that are not calculated in accordance
with U.S. generally accepted accounting principles ("GAAP").
In addition to analyzing our business based on financial
information prepared in accordance with GAAP, we use these non-GAAP
financial measures internally to evaluate our performance, engage
in financial and operational planning and determine incentive
compensation because we believe that these measures provide
additional perspective on and, in some circumstances are more
closely correlated to, the performance of our underlying, ongoing
business. We provide these non-GAAP financial measures to investors
as supplemental metrics to assist readers in assessing the effects
of items and events on our financial and operating results on a
year-over-year basis and in comparing our performance to that of
our competitors. However, the non-GAAP financial measures that we
use may be calculated differently from, and therefore may not be
comparable to, similarly titled measures used by other companies.
The non-GAAP financial measures disclosed by us should not be
considered a substitute for, or superior to, financial measures
calculated in accordance with GAAP, and the financial results
calculated in accordance with GAAP and reconciliations to those
financial statements set forth below should be carefully
evaluated.
Exclusions from Non-GAAP Financial Measures
Management
believes it is useful to exclude the following items from the
non-GAAP measures presented in this report for its own and for
investors' assessment of the business for the reasons identified
below:
- LIFO charges and credits are excluded because the factors that
drive last-in first-out ("LIFO") inventory charges or credits, such
as pharmaceutical manufacturer price appreciation or deflation and
year-end inventory levels (which can be meaningfully influenced by
customer buying behavior immediately preceding our fiscal
year-end), are largely out of our control and cannot be accurately
predicted. The exclusion of LIFO charges and credits from non-GAAP
metrics facilitates comparison of our current financial results to
our historical financial results and to our peer group companies'
financial results. We did not recognize any LIFO charges or credits
during the periods presented.
- State opioid assessments related to prior fiscal years is the
portion of state assessments for prescription opioid medications
that were sold or distributed in periods prior to the period in
which the expense is incurred. This portion is excluded from
non-GAAP financial measures because it is retrospectively applied
to sales in prior fiscal years and inclusion would obscure analysis
of the current fiscal year results of our underlying, ongoing
business. Additionally, while states' laws may require us to make
payments on an ongoing basis, the portion of the assessment related
to sales in prior periods are contemplated to be one-time,
nonrecurring items. Income from state opioid assessments related to
prior fiscal years represents reversals of accruals due to changes
in estimates or when the underlying assessments were invalidated by
a Court or reimbursed by manufacturers.
- Shareholder cooperation agreement costs includes costs such as
legal, consulting and other expenses incurred in relation to the
agreement (the "Cooperation Agreement") entered into among Elliott
Associates, L.P., Elliott International, L.P. (together, "Elliott")
and Cardinal Health, including costs incurred to negotiate and
finalize the Cooperation Agreement and costs incurred by the
Business Review Committee of the Board of Directors, which was
formed under this Cooperation Agreement. We have excluded these
costs from our non-GAAP metrics because they do not occur in or
reflect the ordinary course of our ongoing business operations and
may obscure analysis of trends and financial performance.
- Restructuring and employee severance costs are excluded because
they are not part of the ongoing operations of our underlying
business and include, but are not limited to, costs related to
divestitures, closing and consolidating facilities, changing the
way we manufacture or distribute our products, moving manufacturing
of a product to another location, changes in production or business
process outsourcing or insourcing, employee severance and
realigning operations.
- Amortization and other acquisition-related costs, which include
transaction costs, integration costs and changes in the fair value
of contingent consideration obligations, are excluded because they
are not part of the ongoing operations of our underlying business
and to facilitate comparison of our current financial results to
our historical financial results and to our peer group companies'
financial results. Additionally, costs for amortization of
acquisition-related intangible assets are non-cash amounts, which
are variable in amount and frequency and are significantly impacted
by the timing and size of acquisitions, so their exclusion
facilitates comparison of historical, current and forecasted
financial results. We also exclude other acquisition-related costs,
which are directly related to an acquisition but do not meet the
criteria to be recognized on the acquired entity's initial balance
sheet as part of the purchase price allocation. These costs are
also significantly impacted by the timing, complexity and size of
acquisitions.
- Impairments and gain or loss on disposal of assets, net are
excluded because they do not occur in or reflect the ordinary
course of our ongoing business operations and are inherently
unpredictable in timing and amount, and in the case of impairments,
are non-cash amounts, so their exclusion facilitates comparison of
historical, current and forecasted financial results.
- Litigation recoveries or charges, net are excluded because they
often relate to events that may have occurred in prior or multiple
periods, do not occur in or reflect the ordinary course of our
business and are inherently unpredictable in timing and
amount.
- Loss on early extinguishment of debt is excluded because it
does not typically occur in the normal course of business and may
obscure analysis of trends and financial performance. Additionally,
the amount and frequency of this type of charge is not consistent
and is significantly impacted by the timing and size of debt
extinguishment transactions.
- (Gain)/Loss on sale of equity interest in naviHealth was
incurred in connection with the sale of our remaining equity
interest in naviHealth in fiscal 2020. The equity interest was
retained in connection with the initial sale of our majority
interest in naviHealth during fiscal 2019. We exclude this
significant gain because gains or losses on investments of this
magnitude do not typically occur in the normal course of business
and are similar in nature to a gain or loss from a divestiture of a
majority interest, which we exclude from non-GAAP results. The gain
on the initial sale of our majority interest in naviHealth in
fiscal 2019 was also excluded from our non-GAAP measures.
The tax effect for each of the items listed above is determined
using the tax rate and other tax attributes applicable to the item
and the jurisdiction(s) in which the item is recorded. The gross,
tax and net impact of each item are presented with our GAAP to
non-GAAP reconciliations.
Non-GAAP adjusted free cash flow: We provide this non-GAAP
financial measure as a supplemental metric to assist readers in
assessing the effects of items and events on our cash flow on a
year-over-year basis and in comparing our performance to that of
our peer group companies. In calculating this non-GAAP metric,
certain items are excluded from net cash provided by operating
activities because they relate to significant and unusual or
non-recurring events and are inherently unpredictable in timing and
amount. We believe adjusted free cash flow is important to
management and useful to investors as a supplemental measure as it
indicates the cash flow available for working capital needs, debt
repayments, dividend payments, share repurchases, strategic
acquisitions, or other strategic uses of cash. A reconciliation of
our GAAP financial results to Non-GAAP adjusted free cash flow is
provided in Schedule 6 of the financial statement tables included
with this release.
Forward Looking Non-GAAP Measures
In this document, the Company presents certain forward-looking
non-GAAP metrics. The Company does not provide outlook on a GAAP
basis because the items that the Company excludes from GAAP to
calculate the comparable non-GAAP measure can be dependent on
future events that are less capable of being controlled or reliably
predicted by management and are not part of the Company's routine
operating activities. Additionally, management does not forecast
many of the excluded items for internal use and therefore cannot
create or rely on outlook done on a GAAP basis.
The occurrence, timing and amount of any of the items excluded
from GAAP to calculate non-GAAP could significantly impact the
Company's fiscal 2024 GAAP results. Over the past five fiscal
years, the excluded items have impacted the Company's EPS from
$3.49 to $18.06, which includes a $17.54 charge related to the opioid litigation we
recognized in fiscal 2020.
Definitions
Growth rate calculation: growth rates in this report
are determined by dividing the difference between current period
results and prior period results by prior period results.
Interest and Other, net: other (income)/expense, net plus
interest expense, net.
Segment Profit: segment revenue minus (segment cost
of products sold and segment distribution, selling, general and
administrative expenses).
Segment Profit margin: segment profit divided by segment
revenue.
Non-GAAP gross margin: gross margin, excluding LIFO
charges/(credits).
Non-GAAP distribution, selling, general and administrative
expenses or Non-GAAP SG&A: distribution, selling, general
and administrative expenses, excluding state opioid assessment
related to prior fiscal years and shareholder cooperation agreement
costs.
Non-GAAP operating earnings: operating earnings/(loss)
excluding (1) LIFO charges/(credits), (2) state opioid assessment
related to prior fiscal years, (3) shareholder cooperation
agreement costs, (4) restructuring and employee severance, (5)
amortization and other acquisition-related costs, (6) impairments
and (gain)/loss on disposal of assets, net and (7) litigation
(recoveries)/charges, net.
Non-GAAP earnings before income
taxes: earnings/(loss) before income taxes excluding (1)
LIFO charges/(credits), (2) state opioid assessment related to
prior fiscal years, (3) shareholder cooperation agreement costs,
(4) restructuring and employee severance, (5) amortization and
other acquisition-related costs, (6) impairments and (gain)/loss on
disposal of assets, net, (7) litigation (recoveries)/charges, net,
(8) loss on early extinguishment of debt and (9) (gain)/loss on
sale of equity interest in naviHealth.
Non-GAAP net earnings attributable to Cardinal Health,
Inc.: net earnings/(loss) attributable to Cardinal Health,
Inc. excluding (1) LIFO charges/(credits), (2) state opioid
assessment related to prior fiscal years, (3) shareholder
cooperation agreement costs, (4) restructuring and employee
severance, (5) amortization and other acquisition-related costs,
(6) impairments and (gain)/loss on disposal of assets, net, (7)
litigation (recoveries)/charges, net, (8) loss on early
extinguishment of debt and (9) (gain)/loss on sale of equity
interest in naviHealth each net of tax.
Non-GAAP effective tax rate: provision for/(benefit from)
income taxes adjusted for the tax impacts of (1) LIFO
charges/(credits), (2) state opioid assessment related to prior
fiscal years, (3) shareholder cooperation agreement costs, (4)
restructuring and employee severance, (5) amortization and other
acquisition-related costs, (6) impairments and (gain)/loss on
disposal of assets, net, (7) litigation (recoveries)/charges, net,
(8) loss on early extinguishment of debt and (9) (gain)/loss on
sale of equity interest in naviHealth, divided by (earnings before
income taxes adjusted for the nine items above).
Non-GAAP diluted earnings per share attributable to Cardinal
Health, Inc.: non-GAAP net earnings attributable to
Cardinal Health, Inc. divided by diluted weighted-average shares
outstanding.
Non-GAAP adjusted free cash flow: net cash provided by
operating activities less payments related to additions to property
and equipment, excluding settlement payments and receipts related
to matters included in litigation (recoveries)/charges, net, as
defined above, or other significant and unusual or non-recurring
cash payments or receipts.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/cardinal-health-reports-fourth-quarter-and-fiscal-year-2024-results-and-raises-fiscal-year-2025-guidance-302222191.html
SOURCE Cardinal Health, Inc.