Navigation Links
Cardinal Health Reports Second Quarter Results, Revises EPS Outlook
Date:1/29/2008

-- Revenue increases 7 percent to $23 billion

-- Diluted earnings per share from continuing operations increase 16 percent to $0.89 per share; Non-GAAP diluted EPS from continuing operations

increase 8 percent to $0.90 per share

-- Full year Non-GAAP EPS now expected to be $3.75 to $3.85

-- Renews three-year, multi-billon-dollar Walgreens contract

DUBLIN, Ohio, Jan. 29 /PRNewswire-FirstCall/ -- Cardinal Health, a global provider of products and services that improve the safety and productivity of health care, today reported a revenue increase of 7 percent to $23 billion during its second quarter, with earnings per share (EPS) rising 16 percent to $0.89. On a non-GAAP basis, EPS for the quarter ended Dec. 31 grew 8 percent to $0.90(1).

The company also announced a revision to its full year EPS outlook based on several factors affecting its largest operating segment in the second half of the year. Cardinal Health now expects non-GAAP EPS to be in a range of $3.75 to $3.85 for the year, an increase of 10 percent to 13 percent over the prior year.

"We have three of our four operating segments performing on track, showing favorable revenue growth, expanding margins and segment profit that is at or above our guidance for the current year," said R. Kerry Clark, chairman and chief executive officer of Cardinal Health. "Within our supply chain pharmaceutical segment, we have revised our forecast to account for the impact of anti-diversion measures for controlled substances, changes in our expectations for branded price increases and the generics market, and the effect of contract repricings. We still expect double-digit EPS growth for the year and are resolved to strengthen the business as we fix the issues that have hampered our performance.

"We continue to engage in discussions with the DEA to resolve matters affecting three of our pharmaceutical distribution centers regarding the 0.98 N.M.

Net diluted earnings per Common

Share $1.70 $2.45 (31)%

Weighted average number of Common

Shares outstanding:

Basic 360.8 403.4

Diluted 367.8 412.0

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

December 31, June 30,

(in millions) 2007 2007

Assets

Cash and equivalents $1,184.4 $1,308.8

Short-term investments available for sale - 132.0

Trade receivables, net 4,854.6 4,714.4

Current portion of net investment in

sales-type leases 378.3 354.8

Inventories 7,636.8 7,383.2

Prepaid expenses and other 667.7 651.3

Total current assets $14,721.8 $14,544.5

Property and equipment, net 1,680.7 1,647.0

Net investment in sales-type leases,

less current portion 855.9 820.7

Goodwill and other intangibles, net 5,813.1 5,860.9

Other assets 395.3 280.7

Total assets $23,466.8 $23,153.8

Liabilities and Shareholders' Equity

Current portion of long-term

obligations and other short-term borrowings $673.6 $16.0

Accounts payable 8,982.3 9,162.2

Other accrued liabilities 1,751.0 2,247.3

Liabilities from businesses held for

sale and discontinued operations 3.6 34.2

Total current liabilities $11,410.5 $11,459.7

Long-term obligations, less current

portion and other short-term borrowings 3,396.5 3,457.3

Deferred income taxes and other liabilities 1,551.7 859.9

Total shareholders' equity 7,108.1 7,376.9

Total liabilities and shareholders' equity $23,466.8 $23,153.8

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Second Quarter Year-to-Date

(in millions) 2008 2007 2008 2007

Cash Flows From Operating

Activities:

Net earnings $324.7 $739.3 $626.5 $1,010.0

(Earnings) / loss from

discontinued operations 0.4 (423.8) 1.8 (403.1)

Earnings from continuing

operations $325.1 $315.5 $628.3 $606.9

Adjustments to reconcile earnings

from continuing operations

to net cash provided by/(used in)

operating activities:

Depreciation and amortization 97.0 77.0 191.9 155.4

Asset impairments and other (23.0) 12.7 (23.2) 14.4

Equity compensation 28.4 32.9 54.5 70.3

Provision for bad debts 5.3 2.4 10.4 7.8

Change in operating assets and

liabilities, net of effects from

acquisitions:

(Increase) / decrease in trade

receivables 41.3 (699.1) (150.6) (592.1)

(Increase) / decrease in

inventories (486.0) 64.3 (253.6) 184.1

Increase in net investment in

sales-type leases (34.5) (23.5) (58.6) (44.4)

Increase / (decrease) in

accounts payable (116.7) 207.6 (179.9) 76.1

Increase / (decrease) in other

accrued liabilities and

operating items, net 139.0 (42.2) 195.9 139.7

Net cash provided by / (used

in) operating activities -

continuing operations $(24.1) $(52.4) $415.1 $618.2

Net cash provided by / (used

in) operating activities -

discontinued operations (2.0) 5.5 (32.5) 21.6

Net cash provided by / (used in)

operating activities $(26.1) $(46.9) $382.6 $639.8

Cash Flows From Investing

Activities:

Acquisition of subsidiaries, net

of divestitures and cash acquired $48.9 $(56.5) $(39.2) $(121.0)

Proceeds from sale of property

and equipment 4.9 9.7 7.4 13.3

Additions to property and

equipment (80.6) (85.4) (172.1) (154.1)

Sale / (purchase) of investment

securities available for sale, net - (10.6) 131.9 31.3

Net cash used in investing

activities - continuing

operations $(26.8) $(142.8) $(72.0) $(230.5)

Net cash used in investing

activities - discontinued

operations - (11.5) - (7.9)

Net cash used in investing

activities $(26.8) $(154.3) $(72.0) $(238.4)

Cash Flows From Financing

Activities:

Net change in commercial paper

and short-term borrowings $287.4 $(101.7) $519.4 $3.7

Reduction of long-term

obligations (1.2) (661.4) (14.1) (689.2)

Proceeds from long-term

obligations, net of issuance

costs 1.0 850.0 1.0 851.7

Proceeds from issuance of Common

Shares 58.9 18.1 164.4 75.4

Tax benefits from exercises of

stock options 2.4 4.6 14.0 17.1

Dividends on Common Shares (43.5) (36.4) (87.7) (73.4)

Purchase of Common Shares

in treasury (357.3) (300.0) (1,032.0) (745.3)

Net cash used in financing

activities - continuing

operations $(52.3) $(226.8) $(435.0) $(560.0)

Net cash used in financing

activities - discontinued

operations - (11.5) - (24.0)

Net cash used in financing

activities $(52.3) $(238.3) $(435.0) $(584.0)

Net decrease in cash and

equivalents (105.2) (439.5) (124.4) (182.6)

Cash and equivalents at

beginning of period $1,289.6 $1,444.2 $1,308.8 $1,187.3

Cash and equivalents at

end of period $1,184.4 $1,004.7 $1,184.4 $1,004.7

CARDINAL HEALTH, INC. AND SUBSIDIARIES

BUSINESS ANALYSIS

TOTAL COMPANY

Non-GAAP

Second Quarter Second Quarter

(in millions) 2008 2007 2008 2007

Revenue

Amount $23,283 $21,785

Growth Rate 7 % 13 %

Operating Earnings

Amount $519 $512 $526 $544

Growth Rate 1 % 12 % (3)% 16 %

Earnings from Continuing Operations

Amount $325 $316 $329 $341

Growth Rate 3 % 11 % (3)% 15 %

Non-GAAP

Year-to-Date Year-to-Date

(in millions) 2008 2007 2008 2007

Revenue

Amount $45,256 $42,722

Growth Rate 6 % 12 %

Operating Earnings

Amount $1,009 $963 $1,038 $1,019

Growth Rate 5 % 17 % 2 % 19 %

Earnings from Continuing Operations

Amount $628 $607 $647 $649

Growth Rate 4 % 17 % (0)% 19 %

Refer to the GAAP / Non-GAAP Reconciliation for definitions and

calculations supporting the non-GAAP balances.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

SEGMENT BUSINESS ANALYSIS

HEALTHCARE SUPPLY CHAIN SERVICES CLINICAL AND MEDICAL PRODUCTS

Second Quarter Second Quarter

(in millions) 2008 2007 (in millions) 2008 2007

PHARMACEUTICAL CLINICAL TECHNOLOGIES AND SERVICES

Revenue Revenue

Amount $20,351 $19,238 Amount $715 $662

Growth Rate 6 % 13 % Growth Rate 8 % 10 %

Mix 86 % 87 % Mix 3 % 3 %

Segment Profit (1) Segment Profit (1)

Amount $258 $328 Amount $115 $92

Growth Rate (21)% 19 % Growth Rate 26 % 16 %

Mix 50 % 60 % Mix 23 % 17 %

Segment Profit Segment Profit

Margin 1.27 % 1.71 % Margin 16.16 % 13.87 %

MEDICAL MEDICAL PRODUCTS AND TECHNOLOGIES

Revenue Revenue

Amount $2,015 $1,872 Amount $667 $455

Growth Rate 8 % 6 % Growth Rate 47 % 15 %

Mix 8 % 8 % Mix 3 % 2 %

Segment Profit (1,2) Segment Profit (1,2)

Amount $72 $82 Amount $69 $47

Growth Rate (13)% 15 % Growth Rate 46 % 17 %

Mix 14 % 15 % Mix 13 % 8 %

Segment Profit Segment Profit

Margin 3.55 % 4.38 % Margin 10.31 % 10.32 %

(1) Refer to definitions for an explanation of the segment profit

calculation.

(2) During the third quarter of fiscal 2007, the Company revised the

method used to allocate certain shared costs between the Healthcare

Supply Chain Services - Medical segment and the Medical Products and

Technologies segment to better align costs with the segment that

receives the related benefits. Prior period information has been

reclassified to conform to this new presentation.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

SEGMENT BUSINESS ANALYSIS

HEALTHCARE SUPPLY CHAIN SERVICES CLINICAL AND MEDICAL PRODUCTS

Year-to-Date Year-to-Date

(in millions) 2008 2007 (in millions) 2008 2007

PHARMACEUTICAL CLINICAL TECHNOLOGIES AND SERVICES

Revenue Revenue

Amount $39,572 $37,770 Amount $1,363 $1,257

Growth Rate 5 % 13 % Growth Rate 8 % 7 %

Mix 86 % 87 % Mix 3 % 3 %

Segment Profit (1) Segment Profit (1)

Amount $563 $617 Amount $214 $143

Growth Rate (9)% 23 % Growth Rate 49 % 5 %

Mix 55 % 62 % Mix 21 % 14 %

Segment Profit Segment Profit

Margin 1.42 % 1.63 % Margin 15.68 % 11.40 %

MEDICAL MEDICAL PRODUCTS AND TECHNOLOGIES

Revenue Revenue

Amount $3,936 $3,679 Amount $1,290 $879

Growth Rate 7 % 4 % Growth Rate 47 % 13 %

Mix 8 % 8 % Mix 3 % 2 %

Segment Profit (1,2) Segment Profit (1,2)

Amount $129 $146 Amount $126 $93

Growth Rate (12)% 7 % Growth Rate 35 % 26 %

Mix 12 % 15 % Mix 12 % 9 %

Segment Profit Segment Profit

Margin 3.28 % 3.97 % Margin 9.74 % 10.58 %

(1) Refer to the definitions for an explanation of how the Company

calculates segment profit.

(2) During the third quarter of fiscal 2007, the Company revised the

method used to allocate certain shared costs between the Healthcare

Supply Chain Services - Medical segment and the Medical Products and

Technologies segment to better align costs with the segment that

receives the related benefits. Prior period information has been

reclassified to conform to this new presentation.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

ASSET MANAGEMENT ANALYSIS

Second Quarter Year-to-Date

2008 2007 2008 2007

Receivable Days 20.2 19.2

Days Inventory on Hand 28 28

Debt to Total Capital 36 % 25 %

Net Debt to Capital 29 % 15 %

Return on Equity 18.3% 34.1% 17.4% 23.5%

Non-GAAP Return on Equity 19.4% 15.2% 18.4% 14.3%

Return on Invested Capital 7.01% 13.85% 6.78% 9.51%

Non-GAAP Return on Invested Capital 8.09% 6.53% 7.78% 6.22%

Effective Tax Rate from Continuing

Operations 30.7% 34.2% 31.4% 32.0%

Non-GAAP Effective Tax Rate from

Continuing Operations 31.1% 34.3% 31.7% 32.0%

Refer to the GAAP / Non-GAAP Reconciliation for non-GAAP calculations.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

SCHEDULE OF NOTABLE ITEMS

Second Quarter Year-to-Date

(in millions, except per Common

Share amounts) 2008 2007 2008 2007

Special Items

Restructuring charges $(31.5) $(10.0) $(46.2) $(21.8)

Acquisition integration charges (10.0) (9.1) (15.5) (11.1)

Litigation and other 12.0 (0.5) 9.7 (8.9)

Total special items $(29.5) $(19.6) (52.0) (41.8)

Tax benefit/(expense) 11.2 7.1 18.9 13.1

Special items, net of tax $(18.3) $(12.5) $(33.1) $(28.7)

Increase/(decrease) to diluted

EPS from continuing operations $(0.05) $(0.03) $(0.09) $(0.07)

Impairment Charges and Other

Impairment charges and other $23.0 $(12.6) $23.2 $(14.3)

Tax benefit / (expense) (8.8) 0.1 (8.9) 0.6

Net impairment charges and other,

net of tax $14.2 $(12.5) $14.3 $(13.7)

Increase / (decrease) to diluted

EPS from continuing operations $0.04 $(0.03) $0.04 $(0.03)

Weighted Average Number of Diluted

Shares Outstanding 364.6 410.6 367.8 412.0

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

Second Quarter 2008

Impairment

(in millions, except per Common Special Charges

Share amounts) GAAP Items and Other Non-GAAP

Operating Earnings

Amount $519 $30 ($23) $526

Growth Rate 1 % (3)%

Provision for Income Taxes $144 $11 ($9) $147

Earnings from Continuing Operations

Amount $325 $18 ($14) $329

Growth Rate 3 % (3)%

Diluted EPS from Continuing Operations

Amount $0.89 $0.05 ($0.04) $0.90

Growth Rate 16 % 8 %

Second Quarter 2007

Impairment

Special Charges

GAAP Items and Other Non-GAAP

Operating Earnings

Amount $512 $20 $13 $544

Growth Rate 12 % 16 %

Provision for Income Taxes $164 $7 - $171

Earnings from Continuing Operations

Amount $316 $13 $13 $341

Growth Rate 11 % 15 %

Diluted EPS from Continuing Operations

Amount $0.77 $0.03 $0.03 $0.83

Growth Rate 17 % 20 %

Year-to-Date 2008

Impairment

(in millions, except per Common Special Charges

Share amounts) GAAP Items and Other Non-GAAP

Operating Earnings

Amount $1,009 $52 ($23) $1,038

Growth Rate 5 % 2 %

Provision for Income Taxes $288 $19 ($9) $298

Earnings from Continuing Operations

Amount $628 $33 ($14) $647

Growth Rate 4 % (0)%

Diluted EPS from Continuing Operations

Amount $1.71 $0.09 ($0.04) $1.76

Growth Rate 16 % 12 %

Year-to-Date 2007

diversion of controlled substances," Clark added. "More broadly, in the past 45 days we have been working to put in place an enhanced system of controls across our network to address the security threat that diversion poses to the pharmaceutical supply chain. The impact of these issues may cost more than $30 million for this fiscal year, but the safety and security of the pharmaceutical supply chain is core to our business and its protection is an important public policy priority for all of us."

Q2 and FY08 Year-to-Date Summary

Q2 FY08 Q2 FY07 Y/Y FY08 YTD Y/Y

Revenue $23.3 billion $21.8 billion 7% $45.3 billion 6%

Operating

Earnings $519 million $512 million 1% $1.0 billion 5%

Non-GAAP Operating

Earnings(2) $526 million $544 million (3%) $1.0 billion 2%

Earnings from

Continuing

Operations $325 million $316 million 3% $628 million 4%

Non-GAAP Earnings

from Continuing

Operations(3) $329 million $341 million (3%) $647 million -

Diluted EPS from

Continuing

Operations $0.89 $0.77 16% $1.71 16%

Non-GAAP Diluted EPS

from Continuing

Operations $0.90 $0.83 8% $1.76 12%

Second quarter segment results

Healthcare Supply Chain Services Sector

Revenue in the Healthcare Supply Chain Services-Pharmaceutical segment grew 6 percent during the quarter to $20.4 billion, with sales to non-bulk customers increasing 1 percent to $10.7 billion and sales to bulk customers increasing 12 percent to $9.7 billion. Segment profit declined 21 percent to $258 million, driven by the timing of branded price increases, conditions in the market for generic pharmaceuticals, and the repricing of several large contracts. Results were also dampened by Impairment

Special Charges

GAAP Items and Other Non-GAAP

Operating Earnings

Amount $963 $42 $14 $1,019

Growth Rate 17 % 19 %

Provision for Income Taxes $286 $13 $1 $300

Earnings from Continuing Operations

Amount $607 $29 $14 $649

Growth Rate 17 % 19 %

Diluted EPS from Continuing Operations

Amount $1.47 $0.07 $0.03 $1.57

Growth Rate 23 % 25 %

The sum of the components may not equal the total due to rounding

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

Second Quarter Year-to-Date

(in millions) 2008 2007 2008 2007

GAAP Return on Equity 18.3% 34.1% 17.4% 23.5%

Non-GAAP Return on Equity

Net earnings $324.7 $739.3 $626.5 $1,010.0

Special items, net of tax,

in continuing operations 18.3 12.5 33.1 28.7

Special items, net of tax,

in discontinued operations - 1.7 - 3.1

Income tax benefit related

to PTS discontinued operations - (425.0) - (425.0)

Adjusted net earnings $343.0 $328.5 $659.6 $616.8

Annualized $1,372.0 $1,314.0 1,319.2 1,233.6

Divided by average

shareholders' equity (1) $7,088.2 $8,664.5 $7,184.4 $8,606.5

Non-GAAP return on equity 19.4% 15.2% 18.4% 14.3%

Second Quarter Year-to-Date

(in millions) 2008 2007 2008 2007

GAAP Return on Invested Capital 7.01% 13.85% 6.78% 9.51%

Non-GAAP Return on Invested Capital

Net earnings $324.7 $739.3 $626.5 $1,010.0

Special items, net of tax,

in continuing operations 18.3 12.5 33.1 28.7

Special items, net of tax,

in discontinued operations - 1.7 - 3.1

Interest expense and other,

net of tax 32.0 20.2 59.4 43.8

Income tax benefit related

to PTS discontinued operations - (425.0) - (425.0)

Adjusted net earnings $375.0 $348.7 $719.0 $660.6

Annualized 1,500.0 1,394.8 1,438.0 1,321.2

Divided by average total

invested capital (2) $18,529.9 $21,349.1 $18,483.2 $21,245.3

Non-GAAP return on invested

capital 8.09% 6.53% 7.78% 6.22%

(1) The average shareholders' equity shown above is calculated using the

average of shareholders' equity at the end of the prior and current

quarters except for year-to-date which is calculated as the average

of the prior years' fourth quarter plus each of the current year

quarters.

(2) Total invested capital is calculated as the sum of the current

portion of long-term obligations and other short-term borrowings,

long-term obligations, current portion of long-term obligations and

other short-term borrowings in discontinued operations, long-term

obligations in discontinued operations, total shareholders' equity

and unrecorded goodwill. The average total invested capital is

calculated using the average of total invested capital at the end of

the prior and current quarters except for year-to-date which is

calculated as the average of the prior years' fourth quarter plus

each of the current year quarters. Unrecorded goodwill is $7.5

billion and $9.7 billion, respectively, for the December 31, 2007 and

2006 calculations. Current portion of long-term obligations and

other short-term borrowings in discontinued operations, and long-term

obligations in discontinued operations were $59.2 million, $46.6

million and $41.3 million at June 30, 2006, September 30, 2006, and

December 31, 2006, respectively.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

Second Quarter Year-to-Date

(in millions) 2008 2007 2008 2007

GAAP Effective Tax Rate from

Continuing Operations 30.7% 34.2% 31.4% 32.0%

Non-GAAP Effective Tax Rate from

Continuing Operations

Earnings before income taxes and

discontinued operations $469.2 $479.5 $916.1 $892.9

Special items 29.5 19.6 52.0 41.8

Adjusted earnings before

income taxes and

discontinued operations $498.7 $499.1 $968.1 $934.7

Provision for income taxes $144.1 $164.0 $287.8 $286.0

Special items tax benefit 11.2 7.1 18.9 13.1

Adjusted provision for

income taxes $155.3 $171.1 $306.7 $299.1

Non-GAAP effective tax rate from

continuing operations 31.1% 34.3% 31.7% 32.0%

Second Quarter

2008 2007

Debt to Total Capital 36% 25%

Net Debt to Capital

Current portion of long-term

obligations and other short-term

borrowings $673.6 $48.9

Long-term obligations, less

current portion and other

short-term borrowings 3,396.5 2,935.8

Debt $4,070.1 $2,984.7

Cash and equivalents (1,184.4) (1,004.8)

Short-term investments available

for sale - (467.1)

Net debt $2,885.7 $1,512.8

Total shareholders' equity $7,108.1 $8,907.8

Capital $9,993.8 $10,420.6

Net debt to capital 29% 15%

Forward-Looking Non-GAAP Financial Measures

The Company presents non-GAAP earnings from continuing operations, non

GAAP return on equity, and non-GAAP effective tax rate from continuing

operations (and presentations derived from these financial measures) on a

forward-looking basis. The most directly comparable forward-looking GAAP

measures are earnings from continuing operations, return on equity and

effective tax rate from continuing operations. The Company is unable to

provide a quantitative reconciliation of these forward-looking non-GAAP

measures to the most comparable forward-looking GAAP measures because the

Company cannot reliably forecast special items and impairment charges and

other, which are difficult to predict and estimate and are primarily

dependent on future events. Please note that the unavailable reconciling

items could significantly impact the Company's future financial results.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

DEFINITIONS

GAAP

Debt: long-term obligations plus short-term borrowings

Debt to Total Capital: debt divided by (debt plus total shareholders'

equity)

Diluted EPS from Continuing Operations: earnings from continuing

operations divided by diluted weighted average shares outstanding

Effective Tax Rate from Continuing Operations: provision for income taxes

divided by earnings before income taxes and discontinued operations

Operating Cash Flow: net cash provided by / (used in) operating

activities from continuing operations

Segment Profit: segment revenue minus (segment cost of products sold and

segment selling, general and administrative expenses)

Segment Profit Margin: segment profit divided by segment revenue

Segment Profit Mix: segment profit divided by total segment profit for

all segments

Return on Equity: annualized net earnings divided by average

shareholders' equity

Return on Invested Capital: annualized net earnings divided by (average

total shareholders' equity plus debt plus unrecorded goodwill)

Revenue Mix: segment revenue divided by total segment revenue for all

segments

NON-GAAP

Economic Profit: segment net operating earnings, after-tax minus

(tangible capital multiplied by weighted average cost of capital);

Tangible Capital is the quarterly average calculated as total assets

allocated to the segment less (total liabilities allocated to the

segment, goodwill and intangibles, cash and equivalents and short term

investments available for sale)

Economic Profit Margin: economic profit divided by revenue

Net Debt to Capital: net debt divided by (net debt plus total

shareholders' equity)

Net Debt: debt minus (cash and equivalents and short-term investments

available for sale)

Non-GAAP Diluted EPS from Continuing Operations: non-GAAP earnings from

continuing operations divided by diluted weighted average shares

outstanding

Non-GAAP Diluted EPS from Continuing Operations Growth Rate: (current

period non-GAAP diluted EPS from continuing operations minus prior

period non-GAAP diluted EPS from continuing operations) divided by prior

period non-GAAP diluted EPS from continuing operations

Non-GAAP Earnings from Continuing Operations: earnings from continuing

operations excluding special items and impairment charges and other, both

net of tax

Non-GAAP Earnings from Continuing Operations Growth Rate: (current period

non-GAAP earnings from continuing operations minus prior period non-GAAP

earnings from continuing operations) divided by prior period non-GAAP

earnings from continuing operations

Non-GAAP Effective Tax Rate from Continuing Operations: (provision for

income taxes adjusted for special items) divided by earnings before

income taxes and discontinued operations adjusted for special items)

Non-GAAP Operating Earnings: operating earnings excluding special items

and impairment charges and other

Non-GAAP Operating Earnings Growth Rate: (current period non-GAAP

operating earnings minus prior period non-GAAP operating earnings)

divided by prior period non-GAAP operating earnings

Non-GAAP Operating Margin: non-GAAP operating earnings divided by revenue

Non-GAAP Return on Equity: (annualized current period net earnings plus

special items minus special items tax benefit) divided by average

shareholders' equity (1)

Non-GAAP Return on Invested Capital: (annualized net earnings plus

special items minus special items tax benefit plus interest expense and

other) divided by (average total shareholders' equity plus debt plus

unrecorded goodwill) (1)

(1) For the three and six months ended December 31, 2006, the numerator

in calculating this non-GAAP financial measure also excludes a $425

million income tax benefit related to PTS discontinued operations

recorded in the second quarter of fiscal 2007.

the impact of suspensions to distribute controlled substances from three facilities and enhancements to anti-diversion programs being implemented across the company's entire distribution network. The company continues to expect segment profit to improve in the second half of the fiscal year. Following the close of the quarter, Cardinal Health also completed an early renewal of a three-year, multi-billion-dollar agreement with Walgreens to distribute pharmaceuticals to more than 6,000 drug stores nationwide.

The Healthcare Supply Chain Services-Medical segment saw revenue growth of 8 percent to $2 billion, with increased sales momentum from the prior quarter to hospital, laboratory and ambulatory care customers. Segment profit declined 13 percent to $72 million, primarily driven by a previously disclosed change in corporate cost allocation that reduced segment profit by 7 percentage points and softness in the surgical kitting business. The company continues to expect the segment to return to year-over-year profit growth in the second half of the year from strength in the hospital and laboratory supply businesses.

Clinical and Medical Products Sector

"This quarter, the Clinical and Medical Products (CMP) sector was again an exceptional value driver by accounting for 36 percent of our total segment profit," Clark said. "CMP continues to play a substantial role in our overall results with leading products in the areas of patient safety and infection prevention, both essential and rapidly growing segments of health care."

Revenue for the Medical Products and Technology segment grew 47 percent to $667 million driven by strong sales of infection prevention products and surgical instruments, and the addition of VIASYS Healthcare, which the company acquired last June. Segment profit increased 46 percent to $69 million and benefited from the VIASYS acquisition, which remains ahead of schedule in delivering synergies of $85 million to $100 million per year by fiscal 2010.

The Clinical Technologies and Services segment grew revenue 8 percent to $715 million for the quarter, with strong demand for Pyxis(R) dispensing and supply technologies and strength in Alaris(R) infusion products. Segment profit increased 26 percent to $115 million from favorable product mix and improved operating leverage. Segment profit was negatively affected by a $10

million charge for the Alaris(R) Pump module voluntary recall, bringing the total charges associated with the recall to $14 million.

Additional second quarter and recent highlights include:

-- George S. Barrett joining the company on Jan. 28 as vice chairman and

CEO of the company's Healthcare Supply Chain Services sector. Barrett

was previously the CEO of North America for Teva Pharmaceuticals.

David L. Schlotterbeck, CEO of Cardinal Health's Clinical and Medical

Products sector, was also named vice chairman.

-- Controlled commercial release of the Med Care Safety Solution, which

enables clinicians to more easily monitor patient orders, pre-populate

parameters for continuous IV infusions, verify the accuracy of

medications administered and document to the hospital's IT systems.

The Lahey Clinic Medical Center in Boston will pilot this new solution

that links the workflow across Cardinal Health's Care Fusion(R),

Pyxis(R) and Alaris(R) products.

-- Rollout of an $80 million agreement with a large health system to

provide medical and surgical supplies to more than 100 affiliated

hospitals nationwide.

-- Signing agreements with two group-purchasing organizations for

Presource(R) surgical kits. The agreements allow Cardinal Health to

compete for kitting business at more than 60,000 health care sites.

-- Repurchasing approximately $350 million of Cardinal Health shares

during the quarter, bringing first and second quarter purchases to

more than $940 million.

Outlook

Cardinal Health lowered and narrowed the range it expects for fiscal 2008 non-GAAP diluted EPS to $3.75 to $3.85. It previously expected non-GAAP EPS in a range of $3.95 to $4.15. In making the change, Cardinal Health cited several factors that are having an impact on its Healthcare Supply Chain Services- Pharmaceutical segment, including the timing of new launches and deflationary environment for generic pharmaceuticals; expectations for branded price increases; the repricing of some large customer contracts; and the impact of anti-diversion enhancements.

Conference Call

Cardinal Health will host a conference call and webcast at 8:30 a.m. EST to discuss the results. To access the call and corresponding slide presentation, go to the Investor page at http://www.cardinalhealth.com. The conference call may also be accessed by calling 617-213-4852, passcode 75450455. An audio replay will be available until 11:30 p.m. EST on Jan. 31 at 617-801-6888, passcode 63030220. A transcript and audio replay will also be available at http://www.cardinalhealth.com.

About Cardinal Health

Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is an $87 billion, global company serving the health care industry with products and services that help hospitals, physician offices and pharmacies reduce costs, improve safety, productivity and profitability, and deliver better care to patients. With a focus on making supply chains more efficient, reducing hospital-acquired infections and breaking the cycle of harmful medication errors, Cardinal Health develops market leading technologies, including Alaris(R) IV pumps, Pyxis(R) automated dispensing systems, MedMined(TM) infection surveillance services and the CareFusion(TM) patient identification system. The company also manufactures medical and surgical products and is one of the largest distributors of pharmaceuticals and medical supplies worldwide. Ranked No. 19 on the Fortune 500 and No. 1 in its sector on Fortune's ranking of Most Admired firms, Cardinal Health employs more than 40,000 people on five continents. More information about the company may be found at http://www.cardinalhealth.com.

(1) Non-GAAP diluted EPS from continuing operations: Non-GAAP earnings

from continuing operations divided by diluted weighted average shares

outstanding.

(2) Non-GAAP operating earnings: Operating earnings excluding special

items and impairment charges and other.

(3) Non-GAAP earnings from continuing operations: Earnings from

continuing operations excluding special items and impairment charges

and other, both net of tax.

A reconciliation of the differences between these non-GAAP financial measures and their most directly comparable GAAP financial measures is provided in the attached tables and at http://www.cardinalhealth.com.

This news release contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. The most significant of these uncertainties are described in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports) and exhibits to those reports, and include (but are not limited to) the following: competitive pressures in its various lines of business; the loss of one or more key customer or supplier relationships or changes to the terms of those relationships; uncertainties relating to timing of generic introductions and the frequency or rate of branded pharmaceutical price appreciation or generic pharmaceutical price deflation; changes in the distribution patterns or reimbursement rates for health-care products and/or services; the results, consequences, effects or timing of any inquiry or investigation by any regulatory authority or any legal or administrative proceedings; future actions of regulatory bodies or government authorities relating to our manufacturing or sale of products and other costs or claims that could arise from our manufacturing, compounding or repackaging operations or from other services; the costs, difficulties and uncertainties related to the integration of acquired businesses; and general economic and market conditions. This news release reflects management's views as of Jan. 29, 2008. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

Second Quarter

(in millions, except per Common

Share amounts) 2008 2007 % Change

Revenue $23,282.7 $21,784.6 7%

Cost of products sold 21,928.1 20,484.7 7%

Gross margin $1,354.6 $1,299.9 4%

Selling, general and administrative

expenses 828.9 755.8 10%

Impairment charges and other (23.0) 12.6 N.M.

Special items:

Restructuring charges 31.5 10.0 N.M.

Acquisition integration charges 10.0 9.1 N.M.

Litigation and other (12.0) 0.5 N.M.

Operating earnings $519.2 $511.9 1%

Interest expense and other 50.0 32.4 54%

Earnings before income taxes and

discontinued operations $469.2 $479.5 (2)%

Provision for income taxes 144.1 164.0 (12)%

Earnings from continuing operations $325.1 $315.5 3%

Earnings / (loss) from discontinued

operations (net of tax (expense) /

benefit of ($0.7) and $416.1 for

the second quarter of fiscal 2008

and 2007, respectively) (0.4) 423.8 N.M.

Net earnings $324.7 $739.3 (56)%

Basic earnings per Common Share:

Continuing operations $0.91 $0.78 17%

Discontinued operations - 1.06 N.M.

Net basic earnings per Common Share $0.91 $1.84 (51)%

Diluted earnings per Common Share:

Continuing operations $0.89 $0.77 16%

Discontinued operations - 1.03 N.M.

Net diluted earnings per Common Share $0.89 $1.80 (51)%

Weighted average number of Common

Shares outstanding:

Basic 358.7 402.2

Diluted 364.6 410.6

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

Year-to-Date

(in millions, except per Common Share

amounts) 2008 2007 % Change

Revenue $45,256.1 $42,722.1 6%

Cost of products sold 42,559.3 40,221.7 6%

Gross margin 2,696.8 2,500.4 8%

Selling, general and administrative

expenses 1,659.0 1,481.3 12%

Impairment charges and other (23.2) 14.3 N.M.

Special items:

Restructuring charges 46.2 21.8 N.M.

Acquisition integration charges 15.5 11.1 N.M.

Litigation and other (9.7) 8.9 N.M.

Operating earnings 1,009.0 963.0 5%

Interest expense and other 92.9 70.1 33%

Earnings before income taxes and

discontinued operations 916.1 892.9 3%

Provision for income taxes 287.8 286.0 1%

Earnings from continuing operations 628.3 606.9 4%

Earnings / (loss) from discontinued

operations (net of tax (expense) /

benefit of ($2.7) and $435.9 for

fiscal 2008 and 2007 year-to-date,

respectively) (1.8) 403.1 N.M.

Net earnings $626.5 $1,010.0 (38)%

Basic earnings per Common Share:

Continuing operations $1.74 $1.50 16%

Discontinued operations - 1.00 N.M.

Net basic earnings per Common Share $1.74 $2.50 (30)%

Diluted earnings per Common Share:

Continuing operations $1.71 $1.47 16%

Discontinued operations (0.01)
'/>"/>

SOURCE Cardinal Health, Inc.
Copyright©2008 PR Newswire.
All rights reserved

Related medicine news :

1. Cardinal Health Taps Teva Executive George Barrett to Lead Healthcare Supply Chain Services Sector
2. Cardinal Health to Announce Second-Quarter Results on January 29
3. Cardinal Health to Cease Distribution of Controlled Substances from Florida Facility
4. Cardinal Health Foundation Grants $537,000 to Rural, Public Hospitals in Support of IHIS 5 Million Lives Campaign
5. Cardinal Health Receives DEA Order to Temporarily Cease Distribution of Controlled Substances from Auburn, Wash. Facility
6. Cardinal Health, Sentry Data Systems Introduce New Technology to Help Health Care Providers More Cost-Efficiently Care for Underserved
7. Cardinal Health Reports First Quarter Results
8. Cardinal Health Announces Sector Management Change
9. Cardinal Health To Announce First-Quarter Results on November 5
10. Cardinal Health Names CEO R. Kerry Clark as Chairman; Company Founder Robert D. Walter to Retire After 36 Years
11. Cardinal Health Reaffirms Fiscal 2008 EPS Guidance, Updates Segment Profit Outlook
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:6/25/2016)... ... June 25, 2016 , ... As a lifelong Southern Californian, Dr. ... his M.D from the David Geffen School of Medicine at UCLA. He trained in ... to complete his fellowship in hematology/oncology at the UCLA-Olive View-Cedars Sinai program where he ...
(Date:6/25/2016)... ... 2016 , ... On Friday, June 10, Van Mitchell, Secretary of the Maryland ... iHire in recognition of their exemplary accomplishments in worksite health promotion. , The Wellness ... & Wellness Symposium at the BWI Marriott in Linthicum Heights. iHire was one of ...
(Date:6/24/2016)... ... ... A recent article published June 14 on E Online details ... to state that individuals are now more comfortable seeking to undergo not only the ... and cheek reduction. The Los Angeles area medical group, Beverly Hills Physicians (BHP) notes ...
(Date:6/24/2016)... ... June 24, 2016 , ... June 19, 2016 is ... associated with chronic pain and the benefits of holistic treatments, Serenity Recovery Center ... suffering with Sickle Cell Disease. , Sickle Cell Disease (SCD) is a disorder of ...
(Date:6/24/2016)... Texas (PRWEB) , ... June 24, 2016 , ... ... International Conference and Scientific Sessions in Dallas that it will receive two significant ... of the grants came as PHA marked its 25th anniversary by recognizing patients, ...
Breaking Medicine News(10 mins):
(Date:6/23/2016)... startling report released today, National Safety Council research shows ... plan to eliminate prescription opioid overdoses. Prescription Nation ... the worst drug crisis in recorded U.S. history, assigned a "Making ... , New Mexico , Tennessee ... states, three – Michigan , Missouri ...
(Date:6/23/2016)... Pa. , June 23, 2016 Bracket ... will launch its next generation clinical outcomes platform, Bracket eCOA ... Meeting held on June 26 – 30, 2016 in ... the first electronic Clinical Outcome Assessment product of its kind ... Booth #715. Bracket eCOA 6.0 is a flexible ...
(Date:6/23/2016)... June 23, 2016  Guerbet announced today that it ... Supplier Horizon Award . One of 12 ... recognized for its support of Premier members through exceptional ... excellence, and commitment to lower costs. ... recognition of our outstanding customer service from Premier," says ...
Breaking Medicine Technology: