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Cardinal Health Reports Third Quarter Results
Date:5/1/2008

- Revenue increases 5 percent to $22.9 billion - GAAP earnings from continuing operations reach $366 million from a loss

of $5 million in the prior-year period - GAAP diluted earnings per share from continuing operations rise to $1.02

from a loss of $0.01 in prior-year period - Non-GAAP diluted EPS from continuing operations increases 13 percent to

$1.08

DUBLIN, Ohio, May 1 /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 5 percent for its third quarter to nearly $23 billion, with GAAP earnings per share (EPS) reaching $1.02 from a $0.01 loss in the prior-year period.

Special items related to acquisition integration, litigation and restructuring, and impairment charges and other items had a $0.06 dilutive impact on GAAP earnings for the quarter, bringing non-GAAP EPS to $1.08(1), an increase of 13 percent from the prior-year period.

Chairman and Chief Executive Officer R. Kerry Clark said, "Our consolidated business and three of our four operating segments are performing to our expectations. We saw a healthy revenue increase in our clinical and medical products sector, with excellent leverage to the profit line. And our supply chain medical segment continued the turnaround we began earlier this year with a strong quarter of profitable growth.

"Within our supply chain pharmaceutical segment, we are managing the same issues we outlined last quarter, including the re-pricing of large retail accounts and the impact of our controlled substance anti-diversion efforts. However, we have renewed all of our major contracts through fiscal 2009 and, with respect to our anti-diversion efforts, we are putting in place new systems that we believe will return us to a strong position in managing this important industry issue."

Weighted average number of Common

Shares outstanding:

Basic 359.1 400.5

Diluted 365.7 409.5

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

March 31, June 30,

(in millions) 2008 2007

Assets

Cash and equivalents $1,529.0 $1,308.8

Short-term investments available for sale - 132.0

Trade receivables, net 4,974.3 4,714.4

Current portion of net investment in

sales-type leases 381.2 354.8

Inventories 7,256.7 7,383.2

Prepaid expenses and other 578.0 651.3

Assets held for sale 187.9 -

Total current assets 14,907.1 14,544.5

Property and equipment, net 1,679.5 1,647.0

Net investment in sales-type leases,

less current portion 878.2 820.7

Goodwill and other intangibles, net 5,681.0 5,860.9

Other assets 457.6 280.7

Total assets $23,603.4 $23,153.8

Liabilities and Shareholders' Equity

Current portion of long-term

obligations and other short-term borrowings $355.3 $16.0

Accounts payable 8,987.9 9,162.2

Other accrued liabilities 1,778.2 2,247.3

Liabilities from businesses held for

sale and discontinued operations 20.6 34.2

Total current liabilities 11,142.0 11,459.7

Long-term obligations, less current

portion and other short-term borrowings 3,450.1 3,457.3

Deferred income taxes and other liabilities 1,618.1 859.9

Total shareholders' equity 7,393.2 7,376.9

Total liabilities and shareholders' equity $23,603.4 $23,153.8

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Third Quarter Year-to-date

(in millions) 2008 2007 2008 2007

Cash Flows From Operating

Activities:

Net earnings $356.0 $19.0 $982.6 $1,028.9

(Earnings) / loss from discontinued

operations 9.9 (23.9) 11.7 (426.9)

Earnings from continuing

operations 365.9 (4.9) 994.3 602.0

Adjustments to reconcile earnings

from continuing operations to net

cash provided by / (used in)

operating activities:

Depreciation and amortization 93.1 81.7 284.9 237.1

Asset impairments and other 2.4 3.6 (20.8) 18.0

Equity compensation 32.2 39.0 86.7 109.3

Provision for bad debts 11.9 9.2 22.3 17.0

Change in operating assets and

liabilities, net of effects from

acquisitions:

Increase in trade receivables (144.2) (227.6) (294.8) (819.6)

(Increase) / decrease in

inventories 367.3 (172.7) 113.7 11.4

Increase in net investment in

sales-type leases (25.2) (32.6) (83.8) (77.0)

Increase / (decrease) in accounts

payable (37.4) 417.0 (217.2) 493.1

Increase in other accrued

liabilities and operating

items, net 231.2 563.6 427.0 703.3

Net cash provided by operating

activities - continuing

operations 897.2 676.3 1,312.3 1,294.6

Net cash provided by / (used in)

operating activities -

discontinued operations (10.0) 93.7 (42.5) 115.2

Net cash provided by operating

activities 887.2 770.0 1,269.8 1,409.8

Cash Flows From Investing

Activities:

Acquisition of subsidiaries, net of

divestitures and cash acquired 0.2 (28.0) (39.0) (149.0)

Proceeds from sale of property and

equipment 2.9 (9.6) 10.3 3.7

Additions to property and equipment (79.6) (89.1) (251.6) (243.1)

Sale of investment securities

available for sale, net - 167.2 131.9 198.4

Net cash provided by / (used in)

investing activities -

continuing operations (76.5) 40.5 (148.4) (190.0)

Net cash used in investing

activities - discontinued

operations - (72.2) - (80.1)

Net cash used in investing

activities (76.5) (31.7) (148.4) (270.1)

Cash Flows From Financing

Activities:

Net change in commercial paper

and short-term borrowings (317.2) 250.8 202.2 254.5

Reduction of long-term obligations (2.7) (43.6) (15.9) (732.9)

Proceeds from long-term

obligations, net of issuance costs - - - 851.7

Proceeds from issuance of Common

Shares 44.8 243.5 209.2 318.8

Tax benefits from exercises of

stock options 1.3 11.6 15.3 28.7

Dividends on Common Shares (42.7) (36.1) (130.4) (109.5)

Purchase of Common Shares in

treasury (149.6) (1,280.0) (1,181.6) (2,025.2)

Net cash used in financing

activities - continuing

operations (466.1) (853.8) (901.2) (1,413.9)

Net cash used in financing

activities - discontinued

operations - (22.7) - (46.6)

Net cash used in financing

activities (466.1) (876.5) (901.2) (1,460.5)

Net increase / (decrease) in cash

and equivalents 344.6 (138.2) 220.2 (320.8)

Cash and equivalents at beginning

of period 1,184.4 1,004.7 1,308.8 1,187.3

Cash and equivalents at end of

period $1,529.0 $866.5 $1,529.0 $866.5

CARDINAL HEALTH, INC. AND SUBSIDIARIES

BUSINESS ANALYSIS

TOTAL COMPANY

Non-GAAP

Third Quarter Third Quarter

(in millions) 2008 2007 2008 2007

Revenue

Amount $22,910 $21,867

Growth Rate 5% 8%

Operating Earnings / (Loss)

Amount $577 ($10) $613 $606

Growth Rate N.M. (102)% 1% 9%

Earnings / (Loss) from Continuing

Operations

Amount $366 ($5) $390 $390

Growth Rate N.M. (101)% - 10%

Non-GAAP

Year-to-Date Year-to-Date

(in millions) 2008 2007 2008 2007

Revenue

Amount $68,166 $64,589

Growth Rate 6% 11%

Operating Earnings

Amount $1,586 $953 $1,651 $1,625

Growth Rate 66% (30)% 2% 15%

Earnings from Continuing Operations

Amount $994 $602 $1,037 $1,039

Growth Rate 65% (30)% - 16%

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

Third Quarter Third Quarter

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

PHARMACEUTICAL CLINICAL TECHNOLOGIES AND SERVICES

Revenue Revenue

Amount $19,894 $19,246 Amount $747 $674

Growth Rate 3% 8% Growth Rate 11% 12%

Mix 85% 86% Mix 3% 3%

Segment Profit Segment Profit

Amount $300 $380 Amount $127 $98

Growth Rate (21)% 15% Growth Rate 29% 12%

Mix 50% 62% Mix 21% 16%

Segment Profit Segment Profit

Margin 1.51% 1.97% Margin 16.98% 14.58%

MEDICAL MEDICAL PRODUCTS AND TECHNOLOGIES

Revenue Revenue

Amount $2,066 $1,907 Amount $679 $458

Growth Rate 8% 4% Growth Rate 48% 11%

Mix 9% 9% Mix 3% 2%

Segment Profit Segment Profit

Amount $93 $89 Amount $80 $47

Growth Rate 5% (5)% Growth Rate 72% 4%

Mix 16% 14% Mix 13% 8%

Segment Profit Segment Profit

Margin 4.51% 4.65% Margin 11.80% 10.20%

Refer to definitions for an explanation of calculations.

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 $59,465 $57,017 Amount $2,110 $1,931

Growth Rate 4% 11% Growth Rate 9% 8%

Mix 85% 87% Mix 3% 3%

Segment Profit Segment Profit

Amount $863 $996 Amount $341 $242

Growth Rate (13)% 20% Growth Rate 41% 8%

Mix 53% 62% Mix 21% 15%

Segment Profit Segment Profit

Margin 1.45% 1.75% Margin 16.14% 12.51%

MEDICAL MEDICAL PRODUCTS AND TECHNOLOGIES

Revenue Revenue

Amount $6,001 $5,585 Amount $1,969 $1,336

Growth Rate 7% 4% Growth Rate 47% 12%

Mix 9% 8% Mix 3% 2%

Segment Profit Segment Profit

Amount $222 $235 Amount $206 $140

Growth Rate (5)% 2% Growth Rate 47% 17%

Mix 14% 14% Mix 12% 9%

Segment Profit Segment Profit

Margin 3.70% 4.20% Margin 10.45% 10.45%

Refer to the definitions for an explanation of calculations.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

ASSET MANAGEMENT ANALYSIS

Third Quarter Year-to-Date

2008 2007 2008 2007

Receivable Days 20.4 18.9

Days Inventory on Hand 27 29

Debt to Total Capital 34% 29%

Net Debt to Capital 24% 21%

Return on Equity 19.6% 0.9% 18.1% 16.3%

Non-GAAP Return on Equity 21.3% 20.9% 19.3% 16.8%

Return on Invested Capital 7.60% 0.36% 7.06% 6.49%

Non-GAAP Return on Invested Capital 8.68% 8.63% 8.09% 7.11%

Effective Tax Rate from Continuing

Operations 32.9% 88.2% 32.0% 29.3%

Non-GAAP Effective Tax Rate from

Continuing Operations 33.1% 32.0% 32.2% 32.0%

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

CARDINAL HEALTH, INC. AND SUBSIDIARIES

SCHEDULE OF NOTABLE ITEMS

(in millions, except per Common Share Third Quarter Year-to-Date

amounts) 2008 2007 2008 2007

Special Items

Restructuring charges $(8.5) $(6.6) $(54.7) $(28.4)

Acquisition integration charges (4.4) (2.9) (19.9) (14.0)

Litigation and other (22.7) (602.5) (13.1) (611.4)

Total special items (35.6) (612.0) (87.7) (653.8)

Tax benefit 12.9 219.7 31.8 232.7

Special items, net of tax $(22.7) $(392.3) $(55.9) $(421.1)

Decrease to diluted EPS from

continuing operations $(0.06) $(0.96) $(0.15) $(1.03)

Impairment Charges and Other

Impairment charges and other $(1.2) $(3.6) $22.0 $(17.9)

Tax benefit / (expense) 0.4 1.2 (8.5) 1.8

Impairment charges and other, net

of tax $(0.8) $(2.4) $13.5 $(16.1)

Increase / (decrease) to diluted

EPS from continuing operations $- $(0.01) $0.04 $(0.04)

Weighted Average Number of Shares

Outstanding

Weighted average number of diluted

shares outstanding 360.2 394.6 365.7 409.5

Antidilutive effect due to loss from

continuing operations - 10.5 - -

Weighted average number of diluted

shares outstanding for non-GAAP

calculations 360.2 405.1 365.7 409.5

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

(in millions, except per Common Third Quarter 2008

Share amounts) Impairment

Charges

Special and

GAAP Items Other Non-GAAP

Operating Earnings

Amount $577 $36 $1 $613

Growth Rate N.M. 1%

Provision for Income Taxes $180 $13 - $192

Earnings from Continuing Operations

Amount $366 $23 $1 $390

Growth Rate N.M. (0)%

Diluted EPS from Continuing

Operations

Amount $1.02 $0.06 - $1.08

Growth Rate N.M. 13%

Third Quarter 2007

Impairment

Charges

Special and

GAAP Items Other Non-GAAP

Operating Earnings

Amount ($10) $612 $4 $606

Growth Rate (102)% 9%

Provision for Income Taxes ($37) $220 $2 $184

Earnings from Continuing Operations

Amount ($5) $392 $2 $390

Growth Rate (101)% 10%

Diluted EPS from Continuing

Operations

Amount ($0.01) $0.96 $0.01 $0.96

Growth Rate (101)% 16%

(in millions, except per Common Year-to-Date 2008

Share amounts) Impairment

Charges

Special and

GAAP Items Other Non-GAAP

Operating Earnings

Amount $1,586 $88 ($22) $1,651

Growth Rate 66% 2%

Provision for Income Taxes $467 $32 ($9) $491

Earnings from Continuing Operations

Amount $994 $56 ($14) $1,037

Growth Rate 65% (0)%

Diluted EPS from Continuing Operations

Amount $2.72 $0.15 ($0.04) $2.83

Growth Rate 85% 11%

Year-to-Date 2007

Impairment

Charges

Special and

GAAP Items Other Non-GAAP

Operating Earnings

Amount $953 $654 $18 $1,625

Growth Rate (30)% 15%

Q3 and FY08 Year-to-Date Summary

Q3 FY08 Q3 FY07 Y/Y FY08 YTD Y/Y

Revenue $22.9 billion $21.9 billion 5% $68.2 billion 6%

GAAP Operating $577 million $(10) million n.m. $1.6 billion 66%

Earnings

Non-GAAP Operating

Earnings(2) $613 million $606 million 1% $1.7 billion 2%

GAAP Earnings from

Continuing

Operations $366 million $(5) million n.m. $1 billion 65%

Non-GAAP Earnings

from Continuing

Operations(3) $390 million $390 million - $1 billion -

GAAP Diluted EPS

from Continuing

Operations $1.02 $(0.01) n.m. $2.72 85%

Non-GAAP Diluted EPS

from Continuing

Operations $1.08 $0.96 13% $2.83 11%

Third quarter segment results

Healthcare Supply Chain Services Sector

The Healthcare Supply Chain Services - Pharmaceutical segment reported a 3 percent increase in revenue to $19.9 billion. Sales to bulk customers increased 8 percent to $9.1 billion, while sales to non-bulk customers were even with the prior year at $10.8 billion. Revenue growth was dampened by several factors, including customer disruption as the company enhances anti-diversion controls and strengthens its offerings, and by slower overall market growth. Segment profit declined 21 percent to $300 million, primarily from the continued impact of re-pricing several large contracts and the impact of anti-diversion initiatives.

Revenue for the Healthcare Supply Chain Services - Medical segment grew 8 percent to $2.1 billion, with increased sales penetration and growth of existing hospital, lab and ambulatory customers. As expected, the segment returned to positive profit growth during the quarter, with profit increasing 5 percent to $93 million, driven by increased sales volumep>

Provision for Income Taxes $249 $233 $2 $483

Earnings from Continuing Operations

Amount $602 $421 $16 $1,039

Growth Rate (30)% 16%

Diluted EPS from Continuing Operations

Amount $1.47 $1.03 $0.04 $2.54

Growth Rate (27)% 22%

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

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

Third Quarter Year-to-Date

(in millions) 2008 2007 2008 2007

GAAP Return on Equity 19.6% 0.9% 18.1% 16.3%

Non-GAAP Return on Equity

Net earnings $356.0 $19.0 $982.6 $1,028.9

Special items, net of tax, in

continuing operations 22.7 392.3 55.9 421.1

Special items, net of tax, in

discontinued operations - 1.3 - 4.4

(Gain)/loss on sale of PTS, net

of tax, in discontinued

operations (3) 7.6 24.7 7.6 (392.9)

Adjusted net earnings $386.3 $437.3 $1,046.1 $1,061.5

Annualized $1,545.2 $1,749.2 $1,394.8 $1,415.3

Divided by average shareholders'

equity (1) $7,250.7 $8,388.6 $7,236.6 $8,422.3

Non-GAAP return on equity 21.3% 20.9% 19.3% 16.8%

Third Quarter Year-to-Date

(in millions) 2008 2007 2008 2007

GAAP Return on Invested Capital 7.60% 0.36% 7.06% 6.49%

Non-GAAP Return on Invested

Capital

Net earnings $356.0 $19.0 $982.6 $1,028.9

Special items, net of tax, in

continuing operations 22.7 392.3 55.9 421.1

Special items, net of tax, in

discontinued operations - 1.3 - 4.4

Interest expense and other, net

of tax 19.9 20.6 79.4 65.4

(Gain)/loss on sale of PTS, net

of tax, in discontinued

operations (3) 7.6 24.7 7.6 (392.9)

Adjusted net earnings $406.2 $457.9 $1,125.5 $1,126.9

Annualized $1,624.8 $1,831.6 $1,500.7 $1,502.5

Divided by average total

invested capital (2) $18,727.9 $21,206.0 $18,546.9 $21,128.5

Non-GAAP return on invested

capital 8.68% 8.63% 8.09% 7.11%

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

average of the prior and current quarters except for year-to-date

which is calculated as the average of shareholders' equity at the end

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 at

the end 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 March 31, 2008 and 2007 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, $41.3 million and $12.3

million at June 30, 2006, September 30, 2006, December 31, 2006 and

March 31, 2007, respectively.

(3) The amounts previously reported for the three and nine months ended

March 31, 2007, have been adjusted by $24.7 million and $32.1 million,

respectively, to include additional amounts identified as direct costs

associated with the disposition of the PTS Business.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

Third Quarter Year-to-Date

(in millions) 2008 2007 2008 2007

GAAP Effective Tax Rate from

Continuing Operations 32.9% 88.2% 32.0% 29.3%

Non-GAAP Effective Tax Rate from

Continuing Operations

Earnings before income taxes and

discontinued operations $545.4 $(42.0) $1,461.5 $850.9

Special items 35.6 612.0 87.7 653.8

Adjusted earnings before income

taxes and discontinued operations $581.0 $570.0 $1,549.2 $1,504.7

Provision for income taxes $179.5 $(37.1) $467.2 $248.9

Special items tax benefit 12.9 219.7 31.8 232.7

Adjusted provision for income

taxes $192.4 $182.6 $499.0 $481.6

Non-GAAP effective tax rate from

continuing operations 33.1% 32.0% 32.2% 32.0%

Third Quarter

2008 2007

Debt to Total Capital 34% 29%

Net Debt to Capital

Current portion of long-term

obligations and other

short-term borrowings $355.3 $296.9

Long-term obligations, less

current portion and other

short-term borrowings 3,450.1 2,899.0

Debt $3,805.4 $3,195.9

Cash and equivalents (1,529.0) (866.5)

Short-term investments available

for sale - (300.0)

Net debt $2,276.4 $2,029.4

Total shareholders' equity $7,393.2 $7,869.5

Capital $9,669.6 $9,898.9

Net debt to capital 24% 21%

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 / (loss) from continuing operations divided by diluted weighted average shares outstanding

Effective Tax Rate from Continuing Operations: provision for income taxes divided by earnings / (loss) 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

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 / (loss) 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 / (loss) before income taxes and discontinued operations adjusted for special items)

Non-GAAP Operating Earnings: operating earnings / (loss) 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 months ended March 31, 2008 and 2007, the numerator in

calculating this non-GAAP financial measure also excludes the

respective $7.6 million and $24.7 million (gain) / loss, net of tax on

the sale of PTS recorded in discontinued operations. For the nine

months ended March 31, 2008 and 2007, the numerator in calculating

this non-GAAP financial measure also excludes the respective $7.6

million and $(392.9) million on the sale of PTS recorded in

discontinued operations.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

Third Quarter

(in millions) 2008 2007

Clinical Technologies and Services revenue growth 11%

Clinical Technologies and Services revenue $746.6 $674.3

Less: Pharmacy Services business unit revenue (212.7) (226.3)

Clinical Technologies and Services revenue

excluding Pharmacy Services business unit revenue $533.9 $448.0

Clinical Technologies and Services revenue growth

excluding Pharmacy Services business unit revenue 19%

CARDINAL HEALTH, INC. AND SUBSIDIARIES

GAAP / NON-GAAP RECONCILIATION

Third Quarter

(in millions) 2008 2007

HEALTHCARE SUPPLY CHAIN SERVICES

Revenue

Pharmaceutical $19,894 $19,246

Medical 2,066 1,907

Total Sector Revenue $21,960 $21,153

Sector Growth Rate 4%

Segment Profit

Pharmaceutical $300 $380

Medical 93 89

Total Sector Revenue $393 $469

Sector Growth Rate (16)%

Third Quarter

(in millions) 2008 2007

CLINICAL AND MEDICAL PRODUCTS

Revenue

Clinical Technologies and Services $747 $674

Medical Products and Technologies 679 458

Total Sector Revenue $1,426 $1,132

Sector Growth Rate 26%

Segment Profit

Clinical Technologies and Services $127 $98

Medical Products and Technologies 80 47

Total Sector Revenue $207 $145

Sector Growth Rate 43%

(in millions)

HEALTHCARE SUPPLY CHAIN SERVICES

Fiscal

Third Quarter Fiscal 2008 2008

Pharmaceutical January February March Total YTD

Economic Profit

Margin

Segment profit $299.7 $863.1

Effective tax rate

from continuing

operations 36.1% 36.1%

Net operating

earnings,

after-tax

(NOPAT) $191.6 $551.7

Total assets $11,798.1 $11,641.3 $11,694.6

Less: assets from

discontinued

operations - - -

Less: accounts

payable 7,307.0 8,087.8 8,279.2

Less: other

accrued liabilities 1,128.1 1,126.6 1,122.3

Less: liabilities

from businesses

held for sale - - -

Less: deferred

income taxes and

other liabilities 85.6 85.6 37.5

Less: goodwill and

other intangibles,

net 1,334.4 1,334.3 1,334.4

Less: cash and

equivalents 47.1 62.0 30.7

Less: short-term

investments

available for sale - - -

Tangible capital $1,895.9 $945.0 $890.5 $1,243.8 $1,166.0

Multiplied by

weighted average

cost of capital 2.3% 6.8%

Capital charge $28.6 $79.3

Economic

profit $163.0 $472.4

Revenue $19,893.8 $59,465.4

Economic

profit margin 0.82% 0.79%

(in millions)

HEALTHCARE SUPPLY CHAIN SERVICES

Fiscal

Third Quarter Fiscal 2007 2007

Pharmaceutical January February March Total YTD

Economic Profit

Margin

Segment profit $379.7 $996.4

Effective tax rate

from continuing

operations 35.1% 35.1%

Net operating

earnings,

after-tax

(NOPAT) $246.6 $647.1

Total assets $11,423.2 $11,681.7 $12,031.9

Less: assets from

discontinued

operations - - -

Less: accounts

payable 7,144.3 7,582.7 8,696.1

Less: other accrued

liabilities 1,078.3 1,059.3 1,154.0

Less: liabilities

from businesses

held for sale - - -

Less: deferred income

taxes and other

liabilities 90.3 90.3 69.6

Less: goodwill and

other intangibles,

net 1,339.6 1,348.9 1,349.4

Less: cash and

equivalents 115.5 113.0 135.3

Less: short-term

investments available

for sale - - -

Tangible capital $1,655.2 $1,487.5 $627.5 $1,256.7 $1,298.2

Multiplied by

weighted average

cost of capital 2.3% 6.8%

Capital charge $28.9 $88.3

Economic profit $217.7 $558.8

Revenue $19,246.4 $57,016.8

Economic profit

margin 1.13% 0.98%

(in millions)

HEALTHCARE SUPPLY CHAIN SERVICES

Fiscal

Third Quarter Fiscal 2008 2008

Medical January February March Total YTD

Economic Profit

Margin

Segment profit $93.1 $222.1

Effective tax rate

from continuing

operations 27.5% 27.5%

Net operating

earnings,

after-tax

(NOPAT) $67.5 $161.1

Total assets $2,544.3 $2,529.1 $2,451.9

Less: assets from

discontinued

operations - - -

Less: accounts

payable 467.1 516.6 577.5

Less: other accrued

liabilities 86.7 82.2 39.2

Less: liabilities

from businesses held

for sale - - -

Less: deferred income

taxes and other

liabilities 56.5 56.5 60.8

Less: goodwill and

other intangibles,

net 388.2 389.5 387.7

. Segment profit growth was dampened by a previously disclosed change in corporate cost allocation and by continued softness in the surgical kitting business.

Clinical and Medical Products Sector

"Our Clinical and Medical products sector continued to deliver strong year-over-year growth, reflecting our leadership positions in medication dispensing, infusion, respiratory and infection prevention products," Clark said. "We will continue to invest in these businesses to strengthen our offerings for the future."

The Medical Products and Technologies segment grew revenue by 48 percent to $679 million, driven by the acquisition of VIASYS Healthcare and strong growth within the core infection prevention and medical specialty businesses. Segment profit grew 72 percent to $80 million on the VIASYS addition, strong organic growth and the benefit of foreign exchange. The VIASYS integration remains on schedule to deliver $85 million to $100 million in synergies by fiscal 2010.

Revenue for the Clinical Technologies and Services segment increased by 11 percent to $747 million, driven by continued growth in customer installations for medication and supply dispensing products and infusion pumps. Segment profit increased by 29 percent to $127 million from a favorable product mix and improved operating leverage from expense management initiatives. Segment profit for the quarter was partially offset by a $6.5 million reserve for a recall of integrated circuits and connectors on certain Alaris(R) System modules. The company believes it is fully reserved for remediation efforts on all Alaris product recalls and expects to complete them by the end of the calendar year.

Additional third quarter and recent highlights

-- Reached a definitive agreement to acquire the assets of privately held

Enturia Inc. for $490 million. The cash transaction includes Enturia's

leading line of infection prevention products sold under the

Less: cash and

equivalents 12.4 10.6 15.8

Less: short-term

investments available

for sale - - -

Tangible capital $1,533.4 $1,473.7 $1,370.9 $1,459.3 $1,460.8

Multiplied by

weighted average

cost of capital 2.3% 6.8%

Capital charge $33.6 $99.3

Economic profit $33.9 $61.8

Revenue $2,065.8 $6,001.4

Economic profit

margin 1.64% 1.03%

(in millions)

HEALTHCARE SUPPLY CHAIN SERVICES

Fiscal

Third Quarter Fiscal 2007 2007

Medical January February March Total YTD

Economic Profit

Margin

Segment profit $88.7 $234.8

Effective tax rate

from continuing

operations 29.8% 29.8%

Net operating

earnings,

after-tax

(NOPAT) $62.2 $164.8

Total assets $2,562.1 $2,521.4 $2,476.4

Less: assets from

discontinued

operations - - -

Less: accounts

payable 505.2 522.0 528.5

Less: other accrued

liabilities 52.1 52.3 16.2

Less: liabilities

from businesses held

for sale - - -

Less: deferred income

taxes and other

liabilities 48.3 48.4 58.5

Less: goodwill and

other intangibles,

net 377.2 378.1 378.0

Less: cash and

equivalents 6.7 2.9 17.0

Less: short-term

investments

available for sale - - -

Tangible capital $1,572.6 $1,517.7 $1,478.2 $1,522.8 $1,480.6

Multiplied by

weighted average

cost of capital 2.3% 6.8%

Capital charge $35.0 $100.7

Economic profit $27.2 $64.1

Revenue $1,906.9 $5,585.4

Economic profit

margin 1.43% 1.15%

(1) Tangible Capital is a 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)

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

(3) Healthcare Supply Chain Services - Pharmaceutical Tangible Capital

calculated for both current and prior fiscal year includes an

allocation of payables previously held at Corporate to more accurately

reflect the payable balance of the segment.

> ChloraPrep(R) brand name. The acquisition, which is subject to

regulatory approvals, is expected to close in Cardinal Health's fourth

quarter and be $0.01 to $0.02 dilutive to earnings in fiscal 2008 and

accretive in fiscal 2009.

-- Introduced several new products and services, including Rxe-view(TM), a

new service for small hospitals to improve medication safety and

clinician productivity through Web-based medication order management

and a clinical intervention tool; a new surgical gown made from a

unique and proprietary fabric that is softer than other surgical gowns,

improving comfort for clinicians; and an agreement with ClearCount

Medical Solutions to distribute the first system cleared by the Food

and Drug Administration using radio-frequency identification to count

and detect sponges during surgeries.

-- Appointed Michael C. Kaufmann and Craig S. Morford to key executive

posts. Kaufmann, 45, was named group president of the Healthcare

Supply Chain Services - Pharmaceutical segment after most recently

being responsible for Cardinal Health's medical supply chain business.

Morford, 49, was formerly acting deputy U.S. attorney general and will

join the company on May 5 as chief compliance officer.

-- Repurchased $150 million of Cardinal Health shares during the quarter,

bringing total repurchases for the first nine months of fiscal 2008 to

$1.1 billion.

-- Announced recipients of Cardinal Health's Patient Safety Grants

totaling $1 million for new and innovative programs at 34 hospitals,

health systems and community health clinics across the country. More

than 10 percent of the nation's hospitals applied for the grants in the

largest and first-of-its-kind program by a health care company.

Outlook

The company reaffirmed its non-GAAP EPS range of $3.75 to $3.85 for fiscal 2008. Clark stated, "As the remainder of the year unfolds, we expect full-year, non-GAAP EPS to be about in the middle of the range, excluding the potential dilutive impact of the Enturia acquisition of 1 to 2 cents."

Conference Call

Cardinal Health will host a conference call and webcast at 8:30 a.m. EDT to discuss the results. To access the call and corresponding slide presentation, go to the Investor page at http://www.cardinalhealth.com . The conference call may also be accessed by calling 617-213-4853, passcode 66621966. An audio replay will be available until 11:30 p.m. EDT on May 3 at 617-801-6888, passcode 39214175. 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, 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/(loss) excluding

special items and impairment charges and other.

(3) Non-GAAP earnings from continuing operations: Earnings/(loss) 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 Cardinal Health's 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 and branded pharmaceutical 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 Cardinal Health's manufacturing or sale of products and other costs or claims that could arise from its manufacturing, compounding or repackaging operations or from its other services; the costs, difficulties and uncertainties related to the integration of acquired businesses; and conditions in the pharmaceutical market and general economic and market conditions. This news release reflects management's views as of May 1, 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)

(in millions, except per Common Third Quarter

Share amounts) 2008 2007 % Change

Revenue $22,909.6 $21,867.1 5%

Cost of products sold 21,441.8 20,479.6 5%

Gross margin 1,467.8 1,387.5 6%

Selling, general and administrative

expenses 854.5 781.7 9%

Impairment charges and other 1.2 3.6 N.M.

Special items:

Restructuring charges 8.5 6.6 N.M.

Acquisition integration charges 4.4 2.9 N.M.

Litigation and other 22.7 602.5 N.M.

Operating earnings / (loss) 576.5 (9.8) N.M.

Interest expense and other 31.1 32.2 (3)%

Earnings / (loss) before income

taxes and discontinued operations 545.4 (42.0) N.M.

Provision for income taxes 179.5 (37.1) N.M.

Earnings / (loss) from continuing

operations 365.9 (4.9) N.M.

Earnings / (loss) from discontinued

operations (net of tax expense

of $26.3 and $8.1 for the third

quarter of fiscal 2008 and 2007,

respectively) (9.9) 23.9 N.M.

Net earnings $356.0 $19.0 N.M.

Basic earnings / (loss) per Common Share:

Continuing operations $1.03 $(0.01) N.M.

Discontinued operations (0.03) 0.06 N.M.

Net basic earnings per Common Share $1.00 $0.05 N.M.

Diluted earnings / (loss) per Common Share:

Continuing operations $1.02 $(0.01) N.M.

Discontinued operations (0.03) 0.06 N.M.

Net diluted earnings per Common Share $0.99 $0.05 N.M.

Weighted average number of Common

Shares outstanding:

Basic 355.5 394.6

Diluted (1) 360.2 394.6

(1) Due to the loss from continuing operations during the third quarter of

fiscal 2007, potential dilutive Common Shares have not been included

in the denominator of the dilutive per share computation due to their

antidilutive effect.

CARDINAL HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

(in millions, except per Common Share Year-to-Date

amounts) 2008 2007 % Change

Revenue $68,165.8 $64,589.1 6%

Cost of products sold 64,001.1 60,701.3 5%

Gross margin 4,164.7 3,887.8 7%

Selling, general and administrative

expenses 2,513.5 2,263.0 11%

Impairment charges and other (22.0) 17.9 N.M.

Special items:

Restructuring charges 54.7 28.4 N.M.

Acquisition integration charges 19.9 14.0 N.M.

Litigation and other 13.1 611.4 N.M.

Operating earnings 1,585.5 953.1 66%

Interest expense and other 124.0 102.2 21%

Earnings before income taxes and

discontinued operations 1,461.5 850.9 72%

Provision for income taxes 467.2 248.9 88%

Earnings from continuing operations 994.3 602.0 65%

Earnings / (loss) from discontinued

operations (net of tax (expense) /

benefit of ($29.1) and $427.8 for fiscal

2008 and 2007 year-to-date, respectively) (11.7) 426.9 N.M.

Net earnings $982.6 $1,028.9 (5)%

Basic earnings / (loss) per Common Share:

Continuing operations $2.77 $1.50 85%

Discontinued operations (0.03) 1.07 N.M.

Net basic earnings per Common Share $2.74 $2.57 7%

Diluted earnings / (loss) per Common Share:

Continuing operations $2.72 $1.47 85%

Discontinued operations (0.03) 1.04 N.M.

Net diluted earnings per
'/>"/>

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

Related medicine news :

1. Cardinal Health Reaffirms Fiscal 2008 EPS Guidance, Updates Segment Profit Outlook
2. Cardinal Health Names CEO R. Kerry Clark as Chairman; Company Founder Robert D. Walter to Retire After 36 Years
3. Cardinal Health To Announce First-Quarter Results on November 5
4. Cardinal Health Announces Sector Management Change
5. Cardinal Health Reports First Quarter Results
6. Cardinal Health, Sentry Data Systems Introduce New Technology to Help Health Care Providers More Cost-Efficiently Care for Underserved
7. Cardinal Health Receives DEA Order to Temporarily Cease Distribution of Controlled Substances from Auburn, Wash. Facility
8. Cardinal Health Foundation Grants $537,000 to Rural, Public Hospitals in Support of IHIS 5 Million Lives Campaign
9. Cardinal Health to Cease Distribution of Controlled Substances from Florida Facility
10. Cardinal Health to Announce Second-Quarter Results on January 29
11. Cardinal Health Taps Teva Executive George Barrett to Lead Healthcare Supply Chain Services Sector
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