Exhibit 99.01
[Cardinal Health Logo]
7000 Cardinal Place
Dublin, OH 43017
www.cardinal.com
FOR IMMEDIATE RELEASE
CONTACTS:
Media: Jim Mazzola Investors: Steve Fischbach
(614) 757-3690 (614) 757-7067
jim.mazzola@cardinal.com stephen.fischbach@cardinal.com
------------------------ ------------------------------
CARDINAL HEALTH POSTS RECORD SECOND QUARTER
REVENUE, EARNINGS
COMPANY REITERATES FISCAL 2004 OUTLOOK
DUBLIN, OHIO, JAN. 22, 2004--Cardinal Health, Inc. (NYSE: CAH), the leading
provider of products and services supporting the health care industry, today
announced record second quarter revenue, net earnings and earnings per share,
led by strong customer demand for the company's product and service offerings
across the chain of care.
For the quarter ended Dec. 31, 2003, in accordance with generally accepted
accounting principles (GAAP), revenue rose to $14.1 billion, earnings from
continuing operations reached $381 million and earnings per diluted share from
continuing operations improved to $0.87. Year-to-date revenues rose to $27.4
billion, with earnings and earnings per diluted share from continuing operations
reaching $711 million and $1.61, respectively. During the first half of fiscal
2004, the company generated $548 million of operating cash flow, an increase of
53 percent over the first half of fiscal 2003.
"Our financial performance for the second quarter was consistent with our
expectations and once again reflects strong demand from customers in all
segments," said Robert D. Walter, chairman and chief executive officer of
Cardinal Health. "As expected, overall earnings growth was below our historic
and anticipated future levels as strong performances in medical products,
automation and pharmaceutical technologies were offset by short term challenges
in pharmaceutical distribution. Looking forward, we expect results will continue
to demonstrate the power of Cardinal Health's diverse portfolio of health care
products and services."
Cardinal Health made significant progress during the quarter against strategies
to build scale and drive competitive advantage in the health care industry,
expand product and service offerings, and make investments to deliver new levels
of customer value through
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CARDINAL HEALTH POSTS RECORD SECOND QUARTER REVENUE, EARNINGS
PAGE 2
integrated solutions. Strategic investment spending for research, development
and special projects totaled $28 million for the period. Highlights for the
quarter include:
- The strategic acquisition of The Intercare Group, plc., which closed
in December, to increase scale within Cardinal Health's Pharmaceutical
Technologies and Services segment. Intercare, a leading European
pharmaceutical products and services company, significantly expands
Cardinal Health's global reach, enhances proprietary sterile
manufacturing capabilities and broadens participation in the fast
growing European generic and injectible product markets.
- Sales momentum in the Medical Products and Services segment from new
contracts for distribution and self-manufactured products, which drove
record organic growth rates, was well above industry averages.
- Record second-quarter sales for the flagship Pyxis MedStation(R)
products, the result of continued focus in the market on medication
safety initiatives, combined with a strong increase in sales of Pyxis
SupplyStation(R) products.
- Strong demand for integrated solutions from health care providers.
These solutions include products and services from multiple Cardinal
Health lines of business and now represent more than $6 billion in
annual sales, growing more than 20 percent year-on-year. More than 180
contracts have been signed representing over 900 hospitals.
- The acquisition of Medicap Pharmacies, Inc., to increase the geographic
reach of Cardinal Health's pharmacy franchise, bringing the total
number of franchisees to 1,370 worldwide. System-wide retail sales for
franchisees now total more than $2.5 billion. The Medicap acquisition
was completed in late December.
- Direct Store Door (DSD) pharmaceutical distribution sales increasing
more than 23 percent, reflecting the ramp up of recently won contracts
and strong underlying demand for prescription drugs.
- A pharmacy management agreement with Jackson Memorial Hospital that
represents one of Cardinal Health's largest clinical services and
consulting contracts to date. Jackson Memorial estimates the agreement
will save the hospital $20 million over the five-year contract
duration.
FINANCIAL HIGHLIGHTS AND SEGMENT RESULTS
Special items during the quarter include cash received from a litigation
settlement, which was largely offset by merger-related costs and restructuring
charges. These items generated income of $3.5 million ($3.3 million after tax)
in the second quarter, compared to income of $37.6 million ($22.1 million after
tax) in the same period last year, and increased earnings per diluted share in
the current quarter and comparable quarter by $0.01 and $0.05, respectively.
The following discussion adjusts certain amounts to exclude special items
incurred during the quarter. Please see the attached financial table for a
reconciliation of the reported amounts to the amounts excluding these items.
- EARNINGS PER DILUTED SHARE from continuing operations rose 12 percent to
$0.86 versus $0.77 last year. Earnings from continuing operations rose 9
percent to $378 million from $345 million a year ago.
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CARDINAL HEALTH POSTS RECORD SECOND QUARTER REVENUE, EARNINGS
PAGE 3
- OPERATING REVENUES rose 11 percent to a record $14.1 billion, from
$12.7 billion a year ago.
- OPERATING EARNINGS rose 6 percent to $584 million from $553 million a
year ago. Strong growth in the company's Medical Products and Services,
Pharmaceutical Technologies and Services, and Automation and Information
Services segments offset expected weakness in the Pharmaceutical
Distribution and Provider Services segment's operating earnings.
- INTEREST EXPENSE AND OTHER declined by 38 percent, driven by strong cash
flow, lower interest rates and a gain of $9 million from the sale of a
non-strategic business.
- RETURN ON EQUITY was 20.5 percent compared to 21.5 percent last year and
RETURN ON INVESTED CAPITAL was 7.90 percent versus 7.96 percent a year
ago.
- OPERATING CASH FLOW of $254 million in the quarter was the result of
strong earnings combined with focused asset management.
- THE RATIO OF NET DEBT-TO-TOTAL CAPITAL was 22 percent, and the company
ended the quarter with $544 million cash on hand.
Specific segment results are included in the table below, followed by a
performance summary for each business.
SECOND QUARTER - SEGMENT RESULTS
CONTRIBUTION TO
% OPERATING % OPERATING EARNINGS
($ IN MILLIONS) REVENUE CHANGE EARNINGS CHANGE MIX
------- ------ --------- ------ ------------------
Pharmaceutical Distribution $11,414 9% $271 (8%) 43%
and Provider Services
Medical Products and Services $1,839 12% $160 12% 26%
Pharmaceutical Technologies and $659 58% $113 33% 18%
Services
Automation and Information Services $187 14% $80 15% 13%
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES experienced strong demand,
with Direct Store Door (DSD) drug distribution sales rising to $9.9 billion, a
more than 23 percent increase over last year. These gains were dampened by the
expected decline in Bulk from Stock sales as vendor buy opportunities versus the
prior year continued to be restricted. Overall, the segment delivered a 9
percent revenue increase to $11.4 billion with operating earnings of $271
million. Gross margin pressures were partially offset by ongoing productivity
improvements reflecting strong expense leverage. Earnings and working capital
leverage enabled this segment to contribute positive cash flow for the quarter.
Comparisons for the segment are expected to improve as it passes the strong
performance delivered during the first half of fiscal 2003.
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CARDINAL HEALTH POSTS RECORD SECOND QUARTER REVENUE, EARNINGS
PAGE 4
MEDICAL PRODUCTS AND SERVICES posted record revenue, which increased 12 percent
to more than $1.8 billion. Revenue growth and record second-quarter operating
earnings of $160 million were driven by momentum with new and existing
distribution contracts and growth of new self-manufactured products, including
surgeon gloves, bone-cement delivery systems used to repair fractures, thermal
therapy products and procedure-based delivery systems. The impact of product mix
and increases in raw material costs -- primarily resin and latex -- were offset
by expense leverage and productivity improvements to yield 12 percent operating
earnings growth. This business continued to show strong return on sales of 8.71
percent.
PHARMACEUTICAL TECHNOLOGIES AND SERVICES delivered record operating results with
a year-over-year revenue increase of 58 percent to $659 million and earnings
growth of 33 percent to $113 million. Growth during the period was driven by
strong contributions from nuclear pharmacy services, oral technologies and
packaging services. In addition to strong underlying growth in nuclear pharmacy
services, operational highlights included the completion of pharmacy
consolidation resulting from the January 2003 acquisition of Syncor. Gains in
oral drug manufacturing and packaging services were led by ongoing demand for
Pfizer's Detrol LA(TM), Lilly's Zyprexa(R) Zydis(R), AstraZeneca's Crestor(R),
and Wyeth's Advil(R), all of which are manufactured or packaged by Cardinal
Health.
AUTOMATION AND INFORMATION SERVICES revenue grew 14 percent year-over-year to
$187 million, the segment's second largest quarter ever. Revenue growth
reflected healthy demand in all product categories. Installation productivity
and efficiency continue to improve as return on sales increased 37 basis points
to 42.46 percent. Operating earnings increased 15 percent to $80 million, driven
by strong product installations and ongoing manufacturing and expense
productivity. The backlog of committed contracts ended the quarter at
approximately $207 million.
OUTLOOK
Cardinal Health reiterated full fiscal year guidance of mid-teens or better
earnings per share growth, before special items, and operating cash flow of
approximately $1.3 billion. With improvement in the comparisons for the
Pharmaceutical Distribution and Provider Services segment and continued strong
performances from other segments, second-half growth rates are expected to be
stronger than results for the first half of fiscal 2004.
CONFERENCE CALL
Cardinal Health has scheduled a conference call for today at 11 a.m. Eastern
Standard Time to discuss its second quarter financial performance. To access
this discussion via the Internet, go to the Investor Relations page at
www.cardinal.com. The company has also established a telephone call-in line at
706-679-0766. An audio replay of the conference call will be available until
11:30 p.m. on Jan. 24, 2004 by dialing 706-645-9291, passcode 4709972. A
transcript and replay of the Webcast will be available at the Investor Relations
page on www.cardinal.com.
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CARDINAL HEALTH POSTS RECORD SECOND QUARTER REVENUE, EARNINGS
PAGE 5
ABOUT CARDINAL HEALTH
CARDINAL HEALTH, INC. (www.cardinal.com) is the leading provider of products and
services supporting the health care industry. Cardinal Health develops,
manufactures, packages and markets products for patient care; develops
drug-delivery technologies; distributes pharmaceuticals and medical, surgical
and laboratory supplies; and offers consulting and other services that improve
quality and efficiency in health care. Headquartered in Dublin, Ohio, Cardinal
Health employs more than 50,000 people on five continents and produces annual
revenues of more than $50 billion. Cardinal Health is ranked No.19 on the
current Fortune 500 list and named one of the best U.S. companies by Forbes
magazine for 2004.
####
- --------------------------
Except for historical information, all other information in this news release
consists of forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
materially from those projected, anticipated or implied. The most significant of
these uncertainties are described in Cardinal Health's Form 10-K, Form 8-K and
Form 10-Q reports (including all amendments to those reports) and exhibits to
those reports, and include (but are not limited to) the costs, difficulties, and
uncertainties related to the integration of acquired businesses, the loss of one
or more key customer or supplier relationships or changes to the terms of those
relationships, changes in the distribution patterns or reimbursement rates for
health-care products and/or services, the costs and other effects of
governmental regulation and legal and administrative proceedings, and general
economic and market conditions. Cardinal Health undertakes no obligation to
update or revise any forward-looking statement.
CARDINAL HEALTH, INC.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
SECOND QUARTER
----------------------------------------------------------------
December December
2003 2002 % Change
----------------------------------------------------------------
Operating revenue $ 14,093.6 $ 12,706.3 11%
Operating cost of products sold 12,922.9 11,626.8 11%
------------------- ------------------
Operating gross margin 1,170.7 1,079.5 8%
Bulk deliveries to customer warehouses and other 2,256.8 1,384.7 63%
Cost of products sold - bulk deliveries and other 2,256.8 1,384.7 63%
------------------- ------------------
Bulk gross margin - - N.M.
Selling, general and administrative expenses 586.9 526.2 12%
Special items - merger charges 7.8 22.0 N.M.
- other (11.3) (59.6) N.M.
------------------- ------------------
Operating earnings 587.3 590.9 (1)%
Interest expense and other 19.4 31.5 (38)%
------------------- ------------------
Earnings before income taxes and discontinued operations 567.9 559.4 2%
Provision for income taxes 187.0 191.9 (3)%
------------------- ------------------
Earnings from continuing operations 380.9 367.5 4%
Loss from discontinued operations (net of tax of $3.1) (5.1) - N.M.
------------------- ------------------
Net earnings $ 375.8 $ 367.5 N.M.
=================== ==================
Basic earnings per Common Share:
Continuing operations $ 0.88 $ 0.83 6%
Discontinued operations (0.01) - N.M.
------------------- ------------------
Net basic earnings per Common Share $ 0.87 $ 0.83 N.M.
=================== ==================
Diluted earnings per Common Share:
Continuing operations 0.87 $ 0.82 6%
Discontinued operations (0.01) - N.M.
------------------- ------------------
Net diluted earnings per Common Share $ 0.86 $ 0.82 M.M.
================== ==================
Weighted average number of shares outstanding:
Basic 433.2 442.0
Diluted 439.0 450.0
- ------------------------------------------------------------------------------------------------------------------------------------
The following table summarizes the impact of special items on net
earnings and diluted earnings per Common Share in the quarters in which
they were recorded:
Current Year Prior Year
----------------------------- -------------------------------
Net Diluted Net Diluted
Earnings EPS Earnings EPS
----------------------------- -------------------------------
Impact of special items - merger charges $ (4.6) $ (0.01) $ (14.0) $ (0.03)
- other 7.9 0.02 36.1 0.08
------------- ------------- -------------- --------------
Impact of special items $ 3.3 $ 0.01 $ 22.1 $ 0.05
============= --=========== ============== ===--=========
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CARDINAL HEALTH, INC.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
YEAR-TO-DATE
----------------------------------------------------------------
December December
2003 2002 % Change
----------------------------------------------------------------
Operating revenue $ 27,381.9 $ 24,122.9 14%
Operating cost of products sold 25,128.0 22,036.5 14%
------------------- ------------------
Operating gross margin 2,253.9 2,086.4 8%
Bulk deliveries to customer warehouses and other 4,357.2 3,054.2 43%
Cost of products sold - bulk deliveries and other 4,357.2 3,054.2 43%
------------------- ------------------
Bulk gross margin - - N.M.
Selling, general and administrative expenses 1,134.5 1,046.9 8%
Special items - merger charges 16.4 33.4 N.M.
- other (6.7) (52.3) N.M.
------------------- ------------------
Operating earnings 1,109.7 1,058.4 5%
Interest expense and other 47.4 62.1 (24)%
------------------- ------------------
Earnings before income taxes and discontinued operations 1,062.3 996.3 7%
Provision for income taxes 351.0 340.5 3%
------------------- ------------------
Earnings from continuing operations 711.3 655.8 8%
Loss from discontinued operations (net of tax of $4.2) (6.9) - N.M.
------------------- ------------------
Net earnings $ 704.4 $ 655.8 N.M.
=================== ==================
Basic earnings per Common Share:
Continuing operations $ 1.63 $ 1.48 10%
Discontinued operations (0.02) - N.M.
------------------- ------------------
Net basic earnings per Common Share $ 1.61 $ 1.48 N.M.
=================== ==================
Diluted earnings per Common Share:
Continuing operations $ 1.61 $ 1.45 11%
Discontinued operations (0.02) - N.M.
------------------- ------------------
Net diluted earnings per Common Share $ 1.59 $ 1.45 N.M.
=================== ==================
Weighted average number of shares outstanding:
Basic 436.8 444.1
Diluted 442.8 452.1
- -----------------------------------------------------------------------------------------------------------------------------------
The following table summarizes the impact of special items on net
earnings and diluted earnings per Common Share in the quarters in which
they were recorded:
Current Year Prior Year
--------------------------- ------------------------------
Net Diluted Net Diluted
Earnings EPS Earnings EPS
----------- ------------ ------------- -------------
Impact of special items - merger charges $ (10.0) $ (0.02) $ (21.2) $ (0.05)
- other 4.6 0.01 27.7 0.06
----------- ------------ ------------- -------------
Impact of special items $ (5.4) $ (0.01) $ 6.5 $ 0.01
=========== ============ ============= =============
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CARDINAL HEALTH, INC.
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
(unaudited)
DECEMBER 31, June 30, December 31,
2003 2003 2002
--------------- ------------ ------------
ASSETS
CURRENT ASSETS
Cash and equivalents $ 544.3 $ 1,724.0 $ 998.9
Trade receivables 3,369.3 2,784.4 2,611.8
Current portion of investment in sales-type leases 192.2 171.8 175.4
Inventories 8,543.8 7,623.3 8,313.3
Prepaid expenses and other 736.8 776.0 770.0
Assets held for sale from discontinued operations 151.8 170.1 -
--------------- ------------ ------------
Total current assets 13,538.2 13,249.6 12,869.4
--------------- ------------ ------------
Property and equipment - net 2,177.3 2,089.5 1,923.3
Investment in sales-type leases 515.0 557.3 525.2
Other assets 3,288.0 2,625.0 1,863.7
--------------- ------------ ------------
TOTAL ASSETS $ 19,518.5 $ 18,521.4 $ 17,181.6
=============== ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable - banks and current portion of
long-term obligations 253.2 $ 228.7 $ 17.2
Accounts payable 6,349.0 5,288.4 6,094.5
Other accrued liabilities 1,791.1 1,733.0 1,462.1
Liabilities from discontinued operations 72.0 64.3 -
--------------- ------------ ------------
Total current liabilities 8,465.3 7,314.4 7,573.8
--------------- ------------ ------------
Long-term obligations, less current portion 2,472.4 2,471.9 2,242.8
Deferred taxes and other liabilities 988.5 977.0 832.8
Total shareholders' equity 7,592.3 7,758.1 6,532.2
--------------- ------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 19,518.5 $ 18,521.4 $ 17,181.6
=============== ============ ============
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CARDINAL HEALTH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN MILLIONS)
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------- ---------------------
DECEMBER 31, DECEMBER 31,
-------------------- ---------------------
2003 2002 2003 2002
------- --------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings from continuing operations $ 380.9 $ 367.5 $ 711.3 $ 655.8
Adjustments to reconcile earnings from continuing operations
to net cash from operations:
Depreciation and amortization 74.5 64.3 143.2 126.5
Change in operating assets and liabilities, net of
effects from acquisitions:
Increase in trade receivables (280.5) (58.0) (491.0) (317.3)
Increase in inventories (231.0) (1,063.1) (861.3) (952.3)
Decrease in net investment in sales-type leases 82.9 134.7 22.0 136.2
Increase in accounts payable 97.4 794.7 964.3 590.0
Other operating items - net 130.1 132.9 59.9 120.0
-------------------- ---------------------
Net cash provided by operating activities 254.3 373.0 548.4 358.9
-------------------- ---------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition/divestiture of subsidiaries, net of cash acquired (484.1) (2.4) (499.1) (7.8)
Proceeds from sale of property, equipment, and other assets 2.7 17.5 5.2 33.8
Additions to property and equipment (86.3) (101.8) (164.1) (172.3)
-------------------- ---------------------
Net cash used in investing activities (567.7) (86.7) (658.0) (146.3)
-------------------- ---------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in commercial paper and short-term debt 0.7 - 0.6 (0.7)
Net change in long-term obligations (156.7) (6.2) (124.3) (7.0)
Proceeds from issuance of Common Shares 34.7 34.3 80.0 77.0
Purchase of Treasury Stock - (250.0) (1,000.0) (642.7)
Other (13.0) (11.1) (26.4) (22.3)
-------------------- ---------------------
Net cash used in financing activities (134.3) (233.0) (1,070.1) (595.7)
-------------------- ---------------------
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS (447.7) 53.3 (1,179.7) (383.1)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 992.0 945.6 1,724.0 1,382.0
-------------------- ---------------------
CASH AND EQUIVALENTS AT END OF PERIOD $ 544.3 $ 998.9 $ 544.3 $ 998.9
==================== =====================
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CARDINAL HEALTH, INC. - SECOND QUARTER FY 2004 BUSINESS ANALYSIS
($ MILLIONS)
- ------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES
-------------------------------------------------
2004 2003 COMMENT
---- ---- -------
- REVENUE
-------
- Amount $11,414 $10,505 RECORD
- Growth Rate 9% 14% DSD + 23%
- Mix 81% 83%
- OPERATING EARNINGS
------------------
- Amount $271 $295 Vendor margins
- Growth Rate (8)% 17%
- Mix 43% 50%
- Ratio to Revenue 2.37% 2.81% Vendor, sell margins
- ------------------------------------------------------------------------------------------------------------------------
MEDICAL PRODUCTS AND SERVICES
-----------------------------
2004 2003 COMMENT
---- ---- -------
- REVENUE
-------
- Amount $1,839 $1,639 RECORD
- Growth Rate 12% 5% Well above market
- Mix 13% 13%
- OPERATING EARNINGS
------------------
- Amount $160 $144 Q2 RECORD
- Growth Rate 12% 10%
- Mix 26% 24%
- Ratio to Revenue 8.71% 8.76% Distribution growth
- ------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICAL TECHNOLOGIES AND SERVICES
----------------------------------------
2004 2003 COMMENT
---- ---- -------
- REVENUE
-------
- Amount $659 $416 RECORD
- Growth Rate 58% 17% Syncor impact
- Mix 5% 3%
- OPERATING EARNINGS
------------------
- Amount $113 $85 Q2 RECORD
- Growth Rate 33% 16% Syncor impact
- Mix 18% 14%
- Ratio to Revenue 17.14% 20.46% Mix, Syncor impact
- ------------------------------------------------------------------------------------------------------------------------
AUTOMATION AND INFORMATION SERVICES
-----------------------------------
2004 2003 COMMENT
---- ---- -------
- REVENUE
-------
- Amount $187 $165 Q2 RECORD
- Growth Rate 14% 18%
- Mix 1% 1%
- OPERATING EARNINGS
------------------
- Amount $80 $69 Q2 RECORD
- Growth Rate 15% 26%
- Mix 13% 12%
- Ratio to Revenue 42.46% 42.09% Productivity, expense leverage
- ------------------------------------------------------------------------------------------------------------------------
- REVENUE AND ALL RATIOS TO REVENUE EXCLUDE BULK DELIVERIES TO CUSTOMER
WAREHOUSES AND OTHER CUSTOMER PASS THROUGH CHARGES.
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CARDINAL HEALTH, INC. - SECOND QUARTER FY 2004 BUSINESS ANALYSIS
($ MILLIONS)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL
-------------------------
2004 2003
---- ----
-----------------------
- REVENUE Excluding Special Items
------- -----------------------
- Amount $14,094 $12,706
- Growth Rate 11% 13%
2004 2003
---- ----
- OPERATING EARNINGS
------------------
- Amount $587 $591 $584 $553
- Growth Rate (1)% 26% 6% 14%
- RATIO TO REVENUE
----------------
- Gross Margin 8.31% 8.50%
- Expenses 4.16% 4.14%
- Special Items (0.02)% (0.30)%
- Operating Earnings 4.17% 4.66% 4.15% 4.36%
- NET EARNINGS*
------------
- Amount $381 $368 $378 $345
- Growth Rate 4% 30% 9% 18%
- Ratio to Revenue 2.70% 2.89% 2.68% 2.72%
- PRODUCTIVITY
------------
- Margin Per Expense Dollar $1.99 $2.05
- ASSET MANAGEMENT
----------------
- Operating Cash Flow $254 $373
- Free Cash Flow $158 $278
- Return on Invested Capital 7.97% 8.44% 7.90% 7.96%
- ------------------------------------------------------------------------------------------------------------------------------------
- REVENUE AND ALL RATIOS TO REVENUE EXCLUDE BULK DELIVERIES TO
CUSTOMER WAREHOUSES AND OTHER CUSTOMER PASS THROUGH CHARGES.
- MARGIN PER EXPENSE DOLLAR = RATIO OF GROSS MARGIN TO EXPENSES
* THE NET EARNINGS SECTION IS PRESENTED BEFORE DISCONTINUED OPERATIONS.
SEE THE GAAP/NON-GAAP RECONCILIATION FOR THE CALCULATIONS AND
DEFINITIONS SUPPORTING THE BALANCES EXCLUDING SPECIAL ITEMS.
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CARDINAL HEALTH, INC. - FIRST SIX MONTHS OF FY 2004 BUSINESS ANALYSIS
($ MILLIONS)
- --------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES
-------------------------------------------------
2004 2003
---- ----
- REVENUE
-------
- Amount $22,238 $19,824
- Growth Rate 12% 16%
- Mix 81% 82%
- OPERATING EARNINGS
------------------
- Amount $537 $557
- Growth Rate (4)% 19%
- Mix 45% 50%
- Ratio to Revenue 2.41% 2.81%
- --------------------------------------------------------------------------------------------------------------------------------
MEDICAL PRODUCTS AND SERVICES
-----------------------------
2004 2003
---- ----
- REVENUE
-------
- Amount $3,572 $3,234
- Growth Rate 10% 6%
- Mix 13% 14%
- OPERATING EARNINGS
------------------
- Amount $310 $282
- Growth Rate 10% 10%
- Mix 26% 26%
- Ratio to Revenue 8.69% 8.73%
- --------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICAL TECHNOLOGIES AND SERVICES
----------------------------------------
2004 2003
---- ----
- REVENUE
-------
- Amount $1,265 $803
- Growth Rate 58% 18%
- Mix 5% 3%
- OPERATING EARNINGS
------------------
- Amount $220 $158
- Growth Rate 39% 17%
- Mix 18% 14%
- Ratio to Revenue 17.38% 19.64%
- --------------------------------------------------------------------------------------------------------------------------------
AUTOMATION AND INFORMATION SERVICES
-----------------------------------
2004 2003
---- ----
- REVENUE
-------
- Amount $330 $298
- Growth Rate 11% 20%
- Mix 1% 1%
- OPERATING EARNINGS
------------------
- Amount $133 $115
- Growth Rate 15% 36%
- Mix 11% 10%
- Ratio to Revenue 40.18% 38.69%
- --------------------------------------------------------------------------------------------------------------------------------
- REVENUE AND ALL RATIOS TO REVENUE EXCLUDE BULK DELIVERIES TO CUSTOMER
WAREHOUSES AND OTHER CUSTOMER PASS THROUGH CHARGES.
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- --------------------------------------------------------------------------------------------------------------------
CARDINAL HEALTH, INC. - FIRST SIX MONTHS OF FY 2004 BUSINESS ANALYSIS
($ MILLIONS)
- --------------------------------------------------------------------------------------------------------------------
Total
---------------------
2004 2003
------- -------
----------------------------
- REVENUE Excluding Special Items
------- ----------------------------
- Amount $27,382 $24,123
- Growth Rate 14% 14%
2004 2003
---- ----
- OPERATING EARNINGS
------------------
- Amount $1,110 $1,058 $1,119 $1,039
- Growth Rate 5% 22% 8% 16%
- RATIO TO REVENUE
----------------
- Gross Margin 8.23% 8.65%
- Expenses 4.14% 4.34%
- Special Items 0.04% (0.08)%
- Operating Earnings 4.05% 4.39% 4.09% 4.31%
- NET EARNINGS *
------------
- Amount $711 $656 $717 $649
- Growth Rate 8% 24% 10% 19%
- Ratio to Revenue 2.60% 2.72% 2.62% 2.69%
- PRODUCTIVITY
------------
- Margin Per Expense Dollar $1.99 $1.99
- ASSET MANAGEMENT
----------------
- Operating Cash Flow $548 $359
- Free Cash Flow $363 $198
- Return on Invested Capital 7.46% 7.58% 7.52% 7.52%
- --------------------------------------------------------------------------------------------------------------------
- REVENUE AND ALL RATIOS TO REVENUE EXCLUDE BULK DELIVERIES TO CUSTOMER
WAREHOUSES AND OTHER CUSTOMER PASS THROUGH CHARGES.
- MARGIN PER EXPENSE DOLLAR = RATIO OF GROSS MARGIN TO EXPENSES
* THE NET EARNINGS SECTION IS PRESENTED BEFORE DISCONTINUED OPERATIONS.
SEE THE GAAP/NON-GAAP RECONCILIATION FOR THE CALCULATIONS AND DEFINITIONS
SUPPORTING THE BALANCES EXCLUDING SPECIAL ITEMS.
--more--
- --------------------------------------------------------------------------------------------------------------------
CARDINAL HEALTH, INC. - QUARTERLY FY 2004 BUSINESS ANALYSIS
($ MILLIONS)
- --------------------------------------------------------------------------------------------------------------------
PHARMACEUTICAL DISTRIBUTION AND PROVIDER SERVICES
-------------------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- -----
- REVENUE
-------
- Amount $10,824 $11,414
- Growth Rate 16% 9%
- Mix 81% 81%
- OPERATING EARNINGS
------------------
- Amount $266 $271
- Growth Rate 2% (8)%
- Mix 46% 43%
- Ratio to Revenue 2.45% 2.37%
- --------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MEDICAL PRODUCTS AND SERVICES
-----------------------------
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- ----
- REVENUE
-------
- Amount $1,733 $1,839
- Growth Rate 9% 12%
- Mix 13% 13%
- OPERATING EARNINGS
------------------
- Amount $150 $160
- Growth Rate 8% 12%
- Mix 26% 26%
- Ratio to Revenue 8.67% 8.71%
- --------------------------------------------------------------------------------------------------------------------
PHARMACEUTICAL TECHNOLOGIES AND SERVICES
----------------------------------------
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- -----
- REVENUE
-------
- Amount $606 $659
- Growth Rate 57% 58%
- Mix 5% 5%
- OPERATING EARNINGS
------------------
- Amount $107 $113
- Growth Rate 47% 33%
- Mix 19% 18%
- Ratio to Revenue 17.63% 17.14%
- --------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
AUTOMATION AND INFORMATION SERVICES
-----------------------------------
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- -----
- REVENUE
-------
- Amount $143 $187
- Growth Rate 7% 14%
- Mix 1% 1%
- OPERATING EARNINGS
------------------
- Amount $53 $80
- Growth Rate 15% 15%
- Mix 9% 13%
- Ratio to Revenue 37.17% 42.46%
- --------------------------------------------------------------------------------------------------------------------
- REVENUE AND ALL RATIOS TO REVENUE EXCLUDE BULK DELIVERIES TO CUSTOMER
WAREHOUSES AND OTHER CUSTOMER PASS THROUGH CHARGES.
--more--
- --------------------------------------------------------------------------------------------------------------
CARDINAL HEALTH, INC. - QUARTERLY FY 2004 BUSINESS ANALYSIS
($ MILLIONS)
- --------------------------------------------------------------------------------------------------------------
TOTAL (EXCLUDING SPECIAL ITEMS)
-------------------------------
Q1 Q2 Q3 Q4 TOTAL
-- -- -- -- -----
- REVENUE
-------
- Amount $13,288 $14,094
- Growth Rate 16% 11%
- OPERATING EARNINGS
------------------
- Amount $536 $584
- Growth Rate 10% 6%
- RATIO TO REVENUE
----------------
- Gross Margin 8.15% 8.31%
- Expenses 4.12% 4.16%
- Operating Earnings 4.03% 4.15%
- NET EARNINGS*
-------------
- Amount $339 $378
- Growth Rate 12% 9%
- Ratio to Revenue 2.55% 2.68%
- PRODUCTIVITY
------------
- Margin Per Expense Dollar $1.98 $1.99
- ASSET MANAGEMENT
----------------
- Operating Cash Flow $294 $254
- Free Cash Flow $205 $158
- Return on Invested Capital 7.21% 7.90%
- --------------------------------------------------------------------------------------------------------------
</Table>
- REVENUE AND ALL RATIOS TO REVENUE EXCLUDE BULK DELIVERIES TO CUSTOMER
WAREHOUSES AND OTHER CUSTOMER PASS THROUGH CHARGES.
- MARGIN PER EXPENSE DOLLAR = RATIO OF GROSS MARGIN TO EXPENSES
* THE NET EARNINGS SECTION IS PRESENTED BEFORE DISCONTINUED OPERATIONS.
SEE THE GAAP/NON-GAAP RECONCILIATION FOR THE CALCULATIONS AND DEFINITIONS
SUPPORTING THE BALANCES EXCLUDING SPECIAL ITEMS.
--more--
- -------------------------------------------------------------------------------
CARDINAL HEALTH, INC. - FIRST SIX MONTHS FISCAL 2004 AND 2003
ASSET MANAGEMENT ANALYSIS
($ MILLIONS)
- -------------------------------------------------------------------------------
2004
----
Q1 Q2 YTD
-- -- ---
- RECEIVABLE DAYS 18 17
- INVENTORY TURNS 6.5 6.7
- CASH $992 $544
- DEBT $2,724 $2,726
- EQUITY $7,123 $7,592
- NET DEBT/TOTAL CAPITAL 20% 22%
- TANGIBLE NET WORTH $4,782 $4,695
- RETURN ON EQUITY 17.8% 20.7% 19.0%
EXCLUDING SPECIAL ITEMS 18.2% 20.5% 19.1%
- TAX RATE FROM CONTINUING OPERATIONS 33.2% 32.9% 33.0%
EXCLUDING SPECIAL ITEMS 33.2% 33.1% 33.1%
- -----------------------------------------------------------------------------------------------------------------
2003
----
Q1 Q2 YTD
-- -- ---
- RECEIVABLE DAYS 19 17
- INVENTORY TURNS 6.8 7.0
- CASH $946 $999
- DEBT $2,255 $2,260
- EQUITY $6,354 $6,532
- NET DEBT/TOTAL CAPITAL 17% 16%
- TANGIBLE NET WORTH $4,786 $4,960
- RETURN ON EQUITY 18.1% 22.8% 20.4%
EXCLUDING SPECIAL ITEMS 19.0% 21.5% 20.2%
- TAX RATE 34.0% 34.3% 34.2%
EXCLUDING SPECIAL ITEMS 33.3% 33.8% 33.6%
- -------------------------------------------------------------------------------
--more--
- --------------------------------------------------------------------------------------------------------------------------------
CARDINAL HEALTH, INC. - BUSINESS ANALYSIS RECONCILIATION
($ MILLIONS)
- --------------------------------------------------------------------------------------------------------------------------------
SECOND QUARTER FISCAL 2004
--------------------------
GAAP* EXCLUDING
BASIS SPECIAL ITEMS SPECIAL ITEMS
----- ------------- -------------
- SPECIAL ITEMS
-------------
- Merger related costs $8 $8 -
- Other, primarily litigation settlements ($11) ($11) -
- OPERATING EARNINGS
------------------
- Amount $587 ($3) $584
- Growth rate (1)% 6%
- Ratio to revenue (Return on sales) 4.17% 4.15%
- NET EARNINGS**
--------------
- Amount $381 ($3) $378
- Growth rate 4% 9%
- Ratio to revenue 2.70% 2.68%
- Diluted EPS $0.87 ($0.01) $0.86
- INCOME TAX PROVISION
--------------------
- Income tax provision ($187) - ($187)
- ----------------------------------------------------------------------------------------------------------------------------------
SECOND QUARTER FISCAL 2003
--------------------------
GAAP* EXCLUDING
BASIS SPECIAL ITEMS SPECIAL ITEMS
----- ------------- -------------
- SPECIAL ITEMS
-------------
- Merger related costs $22 $22 -
- Other, primarily litigation settlements ($60) ($60) -
- OPERATING EARNINGS
------------------
- Amount $591 ($38) $553
- Growth rate 26% 14%
- Ratio to revenue (Return on sales) 4.66% 4.36%
- NET EARNINGS**
--------------
- Amount $368 ($23) $345
- Growth rate 30% 18%
- Ratio to revenue 2.89% 2.72%
- Diluted EPS $0.82 ($0.05) $0.77
- INCOME TAX PROVISION
--------------------
- Income tax provision ($192) $15 ($177)
- -------------------------------------------------------------------------------------------------------------------------------
FIRST SIX MONTHS OF FISCAL 2004
-------------------------------
GAAP* EXCLUDING
BASIS SPECIAL ITEMS SPECIAL ITEMS
----- ------------- -------------
- SPECIAL ITEMS
-------------
- Merger related costs $16 $16 -
- Other, primarily litigation settlements ($7) ($7) -
- OPERATING EARNINGS
------------------
- Amount $1,110 $9 $1,119
- Growth rate 5% 8%
- Ratio to revenue (Return on sales) 4.05% 4.09%
- NET EARNINGS**
--------------
- Amount $711 $6 $717
- Growth rate 8% 10%
- Ratio to revenue 2.60% 2.62%
- Diluted EPS $1.61 $0.01 $1.62
- INCOME TAX PROVISION
--------------------
- Income tax provision ($351) ($3) ($354)
- --------------------------------------------------------------------------------------------------------------------------------
FIRST SIX MONTHS OF FISCAL 2003
-------------------------------
GAAP* EXCLUDING
BASIS SPECIAL ITEMS SPECIAL ITEMS
----- ------------- -------------
- SPECIAL ITEMS
-------------
- Merger related costs $33 $33 -
- Other, primarily litigation settlements ($52) ($52) -
- OPERATING EARNINGS
------------------
- Amount $1,058 ($19) $1,039
- Growth rate 22% 16%
- Ratio to revenue (Return on sales) 4.39% 4.31%
- NET EARNINGS**
--------------
- Amount $656 ($7) $649
- Growth rate 24% 19%
- Ratio to revenue 2.72% 2.69%
- Diluted EPS $1.45 ($0.01) $1.44
- INCOME TAX PROVISION
--------------------
- Income tax provision ($340) $12 ($328)
- ---------------------------------------------------------------------------------------------------------------------------------
* GAAP - AMOUNTS THAT CONFORM WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
** THE NET EARNINGS SECTION IS PRESENTED BEFORE DISCONTINUED OPERATIONS.
DEFINITIONS:
RETURN ON EQUITY (EXCLUDING SPECIAL ITEMS) = (EARNINGS FROM CONTINUING
OPERATIONS + SPECIAL ITEMS AFTER TAX) ANNUALIZED / AVERAGE SHAREHOLDERS' EQUITY
EXCLUDING SPECIAL ITEMS
NOTE: AVERAGE SHAREHOLDERS' EQUITY EXCLUDING SPECIAL ITEMS USED IN THE RETURN
ON EQUITY CALCULATION WAS $7.4 BILLION AND $6.4 BILLION IN THE SECOND
QUARTER OF FISCAL 2004 AND 2003, RESPECTIVELY. AVERAGE SHAREHOLDERS'
EQUITY EXCLUDING SPECIAL ITEMS WAS $7.5 BILLION AND $6.4 BILLION YEAR TO
DATE FISCAL 2004 AND 2003, RESPECTIVELY.
EFFECTIVE TAX RATE (EXCLUDING SPECIAL ITEMS) = (INCOME TAX PROVISION + TAX
EFFECT OF SPECIAL ITEMS) / (EARNINGS BEFORE INCOME TAXES + SPECIAL ITEMS)
GROWTH RATE (EXCLUDING SPECIAL ITEMS) = (CURRENT QUARTER EARNINGS EXCLUDING
SPECIAL ITEMS - PRIOR YEAR QUARTER EARNINGS EXCLUDING SPECIAL ITEMS) / PRIOR
YEAR QUARTER EARNINGS EXCLUDING SPECIAL ITEMS
RATIO TO REVENUE (EXCLUDING SPECIAL ITEMS) = CURRENT QUARTER EARNINGS EXCLUDING
SPECIAL ITEMS / OPERATING REVENUE
FREE CASH FLOW = OPERATING CASH FLOW - NET PROPERTY ACTIVITY - DIVIDENDS
RETURN ON INVESTED CAPITAL (EXCLUDING SPECIAL ITEMS) = [OPERATING EARNINGS
EXCLUDING SPECIAL ITEMS ANNUALIZED x (1 - EFFECTIVE TAX RATE, EXCLUDING SPECIAL
ITEMS)] / AVERAGE (EQUITY + DEBT + UNRECORDED GOODWILL)
NOTE: AVERAGE UNRECORDED GOODWILL USED IN RETURN ON INVESTED CAPITAL
CALCULATION WAS $9.7 BILLION IN FISCAL 2004 AND FISCAL 2003.
NET DEBT TO TOTAL CAPITAL = (DEBT (LONG-TERM OBLIGATIONS + SHORT TERM
OBLIGATIONS + NOTES PAYABLE BANKS) - CASH) / (DEBT + SHAREHOLDERS' EQUITY)
###