- Fourth quarter revenue increased 13% to $53.5 billion
- Fourth quarter GAAP1 operating
earnings were $137 million and GAAP
diluted loss per share was $0.25
- Fourth quarter non-GAAP operating earnings increased 24% to
$560 million and non-GAAP diluted EPS
increased 48% to $1.55
- Fourth quarter Pharmaceutical segment profit increased 12%
to $504 million and Medical segment
profit increased to $82
million
- Generated both operating cash flow and non-GAAP adjusted
free cash flow of $2.8 billion and
returned over $2.5 billion to
shareholders in fiscal year 20232
- Fiscal year 2024 non-GAAP EPS guidance raised to
$6.50 to $6.75, from $6.45
to $6.70
DUBLIN,
Ohio, Aug. 15, 2023 /PRNewswire/ -- Cardinal
Health (NYSE: CAH) today reported fourth quarter fiscal year 2023
revenues of $53.5 billion, an
increase of 13% from the fourth quarter of last year. GAAP
operating earnings were $137 million,
primarily due to a non-cash, pre-tax goodwill impairment charge of
$368 million in the Medical segment,
which reflects the financial update provided at Investor Day. GAAP
diluted loss per share was $0.25,
primarily due to this impairment, net of tax effects. Non-GAAP
operating earnings increased 24% to $560
million, driven by increases in Medical and Pharmaceutical
segment profit. Non-GAAP diluted earnings per share (EPS) increased
48% to $1.55 in the quarter,
reflecting the increase in non-GAAP operating earnings, lower
interest and other expense and a lower share count, partially
offset by a higher non-GAAP effective tax rate.
Fiscal year 2023 revenues were $205.0
billion, a 13% increase from fiscal year 2022. GAAP
operating earnings were $727 million,
due to cumulative non-cash, pre-tax goodwill impairment charges of
$1.2 billion in the Medical segment.
GAAP diluted EPS were $1.00,
primarily due to these impairments, net of tax effects. Non-GAAP
operating earnings increased 3% to $2.1
billion, driven by an increase in Pharmaceutical segment
profit, partially offset by a decrease in Medical segment profit.
Non-GAAP diluted EPS increased 14% to $5.79 for the year, an all-time high, reflecting
the increase in non-GAAP operating earnings, lower interest and
other expense and a lower share count.
"Fiscal 2023 was an inflection point for Cardinal Health, with
improved performance, strong execution and notable progress against
both our short and long-term plans," said Jason Hollar, CEO of Cardinal Health. "We are
pleased with the strong finish to the year, including robust cash
flow generation, continued strong growth in the Pharmaceutical
segment and significant improvement in the Medical segment, driven
by execution of our Medical Improvement Plan. We enter the new
fiscal year with momentum and are raising our previously
communicated fiscal year 2024 EPS guidance."
Q4 and full year FY23 summary
|
Q4
FY23
|
|
Q4 FY22
|
|
Y/Y
|
|
FY23
|
|
FY22
|
|
Y/Y
|
Revenue
|
$53.5
billion
|
|
$47.1
billion
|
|
13 %
|
|
$205.0
billion
|
|
$181.4
billion
|
|
13 %
|
Operating
earnings/(loss)
|
$137
million
|
|
$36 million
|
|
N.M.
|
|
$727
million
|
|
$(596)
million
|
|
N.M.
|
Non-GAAP operating
earnings
|
$560
million
|
|
$450 million
|
|
24 %
|
|
$2.1
billion
|
|
$2.0 billion
|
|
3 %
|
Net earnings/(loss)
attributable to Cardinal Health, Inc.
|
$(64)
million
|
|
$138 million
|
|
N.M.
|
|
$261
million
|
|
$(933)
million
|
|
N.M.
|
Non-GAAP net earnings
attributable to Cardinal Health, Inc.
|
$397
million
|
|
$289 million
|
|
37 %
|
|
$1.5
billion
|
|
$1.4 billion
|
|
7 %
|
Effective Tax
Rate3
|
154.3 %
|
|
575.3 %
|
|
|
|
58.9 %
|
|
(21.2) %
|
|
|
Non-GAAP Effective Tax
Rate
|
27.4 %
|
|
25.4 %
|
|
|
|
22.8 %
|
|
22.1 %
|
|
|
Diluted EPS
attributable to Cardinal Health, Inc.
|
$(0.25)
|
|
$0.50
|
|
N.M.
|
|
$1.00
|
|
$(3.35)
|
|
N.M.
|
Non-GAAP diluted EPS
attributable to Cardinal Health, Inc.
|
$1.55
|
|
$1.05
|
|
48 %
|
|
$5.79
|
|
$5.06
|
|
14 %
|
Segment results
Pharmaceutical segment
|
Q4
FY23
|
|
Q4 FY22
|
|
Y/Y
|
|
FY23
|
|
FY22
|
|
Y/Y
|
Revenue
|
$49.7
billion
|
|
$43.3
billion
|
|
15 %
|
|
$190.0
billion
|
|
$165.5
billion
|
|
15 %
|
Segment
profit
|
$504
million
|
|
$451 million
|
|
12 %
|
|
$2.0
billion
|
|
$1.8 billion
|
|
13 %
|
Fourth-quarter revenue for the Pharmaceutical segment increased
15% to $49.7 billion, driven by brand
and specialty pharmaceutical sales growth from existing
customers.
Pharmaceutical segment profit increased 12% to $504 million in the fourth quarter, primarily
driven by positive generics program performance.
Medical segment
|
Q4
FY23
|
|
Q4 FY22
|
|
Y/Y
|
|
FY23
|
|
FY22
|
|
Y/Y
|
Revenue
|
$3.8
billion
|
|
$3.8 billion
|
|
— %
|
|
$15.0
billion
|
|
$15.9
billion
|
|
(5) %
|
Segment
profit
|
$82
million
|
|
$(16)
million
|
|
N.M.
|
|
$111
million
|
|
$216 million
|
|
(49) %
|
Fourth-quarter revenue for the Medical segment was flat at
$3.8 billion. This reflects a
decrease in Products and Distribution sales related to lower PPE
volumes and pricing, partially offset by inflationary impacts,
including mitigation initiatives. This decrease within Products and
Distribution was offset by growth in at-Home Solutions.
Medical segment profit increased to $82
million in the fourth quarter, driven by an improvement in
net inflationary impacts, including mitigation initiatives, and
normalization of PPE margins.
Fiscal year 2024
outlook1,4
The company raised its fiscal year 2024 outlook for non-GAAP
earnings per share by $0.05 to
$6.50 to $6.75 from the preliminary outlook previously
communicated at the company's Investor Day5, which
primarily reflects increased expectations for Pharmaceutical
segment profit. The company reiterated its fiscal year 2024
Pharmaceutical segment profit outlook for 4% to 6% growth on higher
ending fiscal year 2023 Pharmaceutical segment profit. The company
also increased its fiscal year 2024 Pharmaceutical revenue outlook,
driven by continued growth of GLP-1 medications, which do not
meaningfully contribute to segment profit. Additionally, the
company narrowed its range for diluted weighted average shares
outstanding. The company reiterated its expectations for all other
fiscal year 2024 outlook items:
Non-GAAP earnings per
share
|
$6.50 -
$6.75
|
Pharmaceutical
segment:
|
|
Revenue
|
10% to 12%
growth
|
Segment
profit
|
4% to 6%
growth
|
Medical
segment:
|
|
Revenue
|
~3% growth
|
Segment
profit
|
~$400M
|
Interest and
other
|
$110M -
$130M
|
Non-GAAP effective tax
rate
|
23.0% -
25.0%
|
Diluted weighted
average shares outstanding
|
250M - 253M
|
Share
repurchases
|
~$500M
|
Capital
Expenditures
|
~$500M
|
Non-GAAP adjusted free
cash flow
|
~$2.0B
|
Recent highlights
- Cardinal Health hosted an Investor Day on June 8th, 2023 where management detailed the
company's growth strategies, highlighted plans for value creation
and provided compelling long-term targets.
- Cardinal Health completed its business and portfolio review of
the Pharmaceutical segment, which included the launch of the new
Navista™ Network supporting community oncologists, the announcement
to retain and invest in Nuclear & Precision Health Solutions
and the merger of its Outcomes™ business into Transaction Data
Systems.
- Cardinal Health announced a new agreement with TrakCel to offer
an integrated cell and gene therapy software solution to help
biopharma companies track cell therapies through multiple stages of
development and commercialization.
- Cardinal Health hosted its 31st annual Retail Business
Conference, bringing together nearly 4,500 attendees from across
the country to celebrate the critical role its independent pharmacy
customers play in caring for their communities and highlight the
company's innovations and commitment to its customers.
- Cardinal Health announced plans to build a new distribution
center in the Greenville, South
Carolina, area, to support its at-Home Solutions
business.
- Cardinal Health was named one of the 2023 Best Companies for
Multicultural Women by Seramount.
- Cardinal Health Board of Directors approved a quarterly
dividend of $0.5006 per share.
Upcoming webcasted investor events
- Morgan Stanley 21st Annual Global Healthcare
Conference at 9:30am ET, September 12, 2023
- Baird 2023 Global Healthcare Conference at 8:30am ET, September 13,
2023
Webcast
Cardinal Health will host a webcast today at 8:30 a.m. Eastern to discuss fourth quarter and
full year results. To access the webcast and corresponding slide
presentation, go to the Investor Relations page at
ir.cardinalhealth.com. No access code is required.
Presentation slides and a webcast replay will be available until
August 14, 2024.
About Cardinal Health
Cardinal Health is a distributor of pharmaceuticals, a global
manufacturer and distributor of medical and laboratory products,
and a provider of performance and data solutions for health care
facilities. With more than 50 years in business, operations in more
than 30 countries and approximately 46,500 employees globally,
Cardinal Health is essential to care. Information about Cardinal
Health is available at cardinalhealth.com.
Contacts
Media: Erich Timmerman,
erich.timmerman@cardinalhealth.com and 614.757.8231
Investors: Kevin Moran,
kevin.moran@cardinalhealth.com and 614.757.7942
1GAAP refers to U.S. generally accepted accounting
principles. This news release includes GAAP financial measures as
well as non-GAAP financial measures, which are financial measures
not calculated in accordance with GAAP. See "Use of Non-GAAP
Measures" following the attached schedules for definitions of the
non-GAAP financial measures presented in this news release and see
the attached schedules for reconciliations of the differences
between the non-GAAP financial measures and their most directly
comparable GAAP financial measures.
2Returned over $2.5
billion to shareholders in fiscal year 2023 through share
repurchases and dividends.
3The GAAP effective tax rate for the fourth quarter
of fiscal year 2023 and fiscal year 2023 were impacted by the
goodwill impairment charges of $368
million and $1.2 billion,
respectively, in the Medical segment. The net tax effect related to
these charges included in the GAAP effective tax rate is an expense
of $52 million in the fourth quarter
and a net benefit of $82 million for
the full year.
The GAAP effective tax rate for the fourth quarter of fiscal
year 2022 and fiscal year 2022 were impacted by the goodwill
impairment charges of $303 million
and $2.1 billion, respectively, in
the Medical segment. The net tax benefit related to these charges
included in the GAAP effective tax rate is $240 million in the fourth quarter and
$150 million for the full year.
4The company does not provide forward-looking
guidance on a GAAP basis as certain financial information, the
probable significance of which cannot be determined, is not
available and cannot be reasonably estimated. See "Use of Non-GAAP
Measures" following the attached schedules for additional
explanation.
5Preliminary fiscal year 2024 outlook previously
communicated at company's June Investor Day: non-GAAP diluted EPS
previously $6.45 to $6.70, Pharmaceutical segment revenue previously
~10% and diluted weighted average shares outstanding previously
250M to 254M.
Cardinal Health uses its website as a channel of distribution
for material company information. Important information, including
news releases, financial information, earnings and analyst
presentations, and information about upcoming presentations and
events is routinely posted and accessible on the Investor Relations
page at ir.cardinalhealth.com. In addition, the website allows
investors and other interested persons to sign up automatically to
receive email alerts when the company posts news releases, SEC
filings and certain other information on its website.
Cautions concerning forward-looking statements
This
release contains forward-looking statements addressing
expectations, prospects, estimates and other matters that are
dependent upon future events or developments. These statements may
be identified by words such as "expect," "anticipate," "intend,"
"plan," "believe," "will," "should," "could," "would," "project,"
"continue," "likely," and similar expressions, and include
statements reflecting future results or guidance, statements of
outlook and various accruals and estimates. These matters are
subject to risks and uncertainties that could cause actual results
to differ materially from those projected, anticipated or implied.
These risks and uncertainties include risks arising from ongoing
inflationary pressures, including the risk that our plans to
mitigate such effects may not be as successful as we anticipate or
that costs could remain elevated; the possibility that our Medical
unit goodwill could be further impaired due to additional changes
to our long-term financial plan, increases in global interest rates
or unfavorable changes in the U.S. statutory tax rate; risks
associated with our ongoing review of our operations, portfolio and
businesses, including the risk that our management team could
become distracted or that the outcome of such review may have
unintended consequences; competitive pressures in Cardinal Health's
various lines of business, including the risk that customers may
reduce purchases made under their contracts with us or terminate or
not renew their contracts; the performance of our generics program,
including the amount or rate of generic deflation and our ability
to offset generic deflation and maintain other financial and
strategic benefits through our generic sourcing venture or other
components of our generics programs; ongoing risks associated with
the distribution of opioids, including the financial impact
associated with the settlements with governmental authorities and
the risk that challenges to tax deductions for opioid-related
losses could adversely impact our financial results; risks arising
from the Department of Justice investigation which we believe
concerns our anti-diversion program and risks associated with the
injunctive relief requirements under the national settlement,
including the risk that we may incur higher costs or operational
challenges in the implementation and maintenance of the required
changes; risks associated with the manufacture and sourcing of
certain products, including risks related to our ability and the
ability of third-party manufacturers to import or export certain
products or component parts and to comply with applicable
regulations; our ability to manage uncertainties associated with
the pricing of branded pharmaceuticals; and risks associated with
business process initiatives, such as the Medical Improvement Plan,
including the possibility that they could fail to achieve the
intended results. Cardinal Health is subject to additional risks
and uncertainties described in Cardinal Health's Form 10-K, Form
10-Q and Form 8-K reports and exhibits to those reports. This
release reflects management's views as of August 15, 2023. Except to the extent required by
applicable law, Cardinal Health undertakes no obligation to update
or revise any forward-looking statement. Forward-looking statements
are aspirational and not guarantees or promises that goals, targets
or projections will be met, and no assurance can be given that any
commitment, expectation, initiative or plan in this report can or
will be achieved or completed. Cardinal Health provides definitions
and reconciliations of non-GAAP financial measures and their most
directly comparable GAAP financial measures at
ir.cardinalhealth.com.
Schedule
1
|
Cardinal Health,
Inc. and Subsidiaries
Consolidated
Statements of Earnings/(Loss) (Unaudited)
|
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
(in millions, except
per common share amounts)
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
Revenue
|
$
53,453
|
|
$
47,103
|
|
13 %
|
|
$
205,012
|
|
$
181,364
|
|
13 %
|
Cost of products
sold
|
51,626
|
|
45,498
|
|
13 %
|
|
198,123
|
|
174,819
|
|
13 %
|
Gross
margin
|
1,827
|
|
1,605
|
|
14 %
|
|
6,889
|
|
6,545
|
|
5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Distribution, selling,
general and administrative expenses
|
1,267
|
|
1,155
|
|
10 %
|
|
4,834
|
|
4,557
|
|
6 %
|
Restructuring and
employee severance
|
33
|
|
45
|
|
|
|
95
|
|
101
|
|
|
Amortization and other
acquisition-related costs
|
69
|
|
87
|
|
|
|
285
|
|
324
|
|
|
Impairments and
(gain)/loss on disposal of assets, net 1
|
367
|
|
286
|
|
|
|
1,250
|
|
2,050
|
|
|
Litigation
(recoveries)/charges, net
|
(46)
|
|
(4)
|
|
|
|
(302)
|
|
109
|
|
|
Operating
earnings/(loss)
|
137
|
|
36
|
|
N.M.
|
|
727
|
|
(596)
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income)/expense,
net
|
1
|
|
30
|
|
|
|
(4)
|
|
16
|
|
|
Interest expense,
net
|
15
|
|
34
|
|
(56) %
|
|
93
|
|
149
|
|
(38) %
|
Loss on early
extinguishment of debt
|
—
|
|
—
|
|
|
|
—
|
|
10
|
|
|
(Gain)/Loss on sale of
equity interest in naviHealth
|
—
|
|
—
|
|
|
|
—
|
|
(2)
|
|
|
Earnings/(loss) before
income taxes
|
121
|
|
(28)
|
|
N.M.
|
|
638
|
|
(769)
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for/(benefit
from) income taxes 2
|
187
|
|
(165)
|
|
N.M.
|
|
376
|
|
163
|
|
N.M.
|
Net
earnings/(loss)
|
(66)
|
|
137
|
|
N.M.
|
|
262
|
|
(932)
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net
(earnings)/loss attributable to noncontrolling interests
|
2
|
|
1
|
|
|
|
(1)
|
|
(1)
|
|
|
Net earnings/(loss)
attributable to Cardinal Health, Inc.
|
$
(64)
|
|
$
138
|
|
N.M.
|
|
$
261
|
|
$
(933)
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(Loss) per
common share attributable to Cardinal Health, Inc.:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
(0.25)
|
|
$
0.51
|
|
N.M.
|
|
$
1.00
|
|
$
(3.35)
|
|
N.M.
|
Diluted
|
(0.25)
|
|
0.50
|
|
N.M.
|
|
1.00
|
|
(3.35)
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
254
|
|
273
|
|
|
|
261
|
|
279
|
|
|
Diluted
|
254
|
|
275
|
|
|
|
262
|
|
279
|
|
|
|
|
1
|
Impairments and
(gain)/loss on disposals of assets, net includes pre-tax goodwill
impairment charges of $368 million and $1.2 billion related to the
Medical segment recorded in the three months and fiscal year ended
June 30, 2023, respectively. During the three months and fiscal
year ended June 30, 2022, impairments and (gain)/loss on disposals
of assets, net included pre-tax goodwill impairment charges of
$303 million and $2.1 billion related to the Medical
segment, respectively.
|
2
|
Provision for/(benefit
from) income taxes includes the tax effects relating to the
cumulative goodwill impairment charges. For fiscal 2023, the net
tax benefit related to the goodwill impairment charges was
$82 million and was included in the annual effective tax rate.
The net tax benefits during the three months and fiscal year ended
June 30, 2022 related to goodwill impairment charges were $240
million and $150 million, respectively, and were included in the
annual effective tax rate.
|
Schedule
2
|
Cardinal Health,
Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(in
millions)
|
June 30,
2023
|
|
June 30,
2022
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and
equivalents
|
$
4,043
|
|
$
4,717
|
Trade receivables,
net
|
11,344
|
|
10,561
|
Inventories,
net
|
15,940
|
|
15,636
|
Prepaid expenses and
other
|
2,362
|
|
2,021
|
Assets held for
sale
|
144
|
|
—
|
Total current
assets
|
33,833
|
|
32,935
|
|
|
|
|
Property and equipment,
net
|
2,462
|
|
2,361
|
Goodwill and other
intangibles, net
|
6,081
|
|
7,629
|
Other assets
|
1,041
|
|
953
|
Total
assets
|
$
43,417
|
|
$
43,878
|
|
|
|
|
Liabilities and
Shareholders' Deficit
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
29,813
|
|
$
27,128
|
Current portion of
long-term obligations and other short-term borrowings
|
792
|
|
580
|
Other accrued
liabilities
|
3,059
|
|
2,842
|
Liabilities related to
assets held for sale
|
42
|
|
—
|
Total current
liabilities
|
33,706
|
|
30,550
|
|
|
|
|
Long-term obligations,
less current portion
|
3,909
|
|
4,735
|
Deferred income taxes
and other liabilities
|
8,653
|
|
9,299
|
|
|
|
|
Total shareholders'
deficit
|
(2,851)
|
|
(706)
|
Total liabilities
and shareholders' deficit
|
$
43,417
|
|
$
43,878
|
Schedule
3
|
Cardinal Health,
Inc. and Subsidiaries
Consolidated
Statements of Cash Flows (Unaudited)
|
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
(in
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net
earnings/(loss)
|
$
(66)
|
|
$
137
|
|
$
262
|
|
(932)
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net earnings/(loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
176
|
|
179
|
|
692
|
|
692
|
Impairments and loss
on sale of other investments
|
7
|
|
21
|
|
7
|
|
24
|
Impairments and
(gain)/loss on disposal of assets, net
|
367
|
|
286
|
|
1,250
|
|
2,050
|
(Gain)/Loss on sale of
equity interest in naviHealth
|
—
|
|
—
|
|
—
|
|
(2)
|
Loss on early
extinguishment of debt
|
—
|
|
—
|
|
—
|
|
10
|
Share-based
compensation
|
27
|
|
16
|
|
96
|
|
81
|
Provision for/(benefit
from) deferred income taxes
|
(31)
|
|
7
|
|
(31)
|
|
7
|
Provision for bad
debts
|
20
|
|
22
|
|
99
|
|
68
|
Change in operating
assets and liabilities, net of effects from acquisitions and
divestitures:
|
|
|
|
|
|
|
|
Increase in trade
receivables
|
(437)
|
|
(333)
|
|
(947)
|
|
(1,526)
|
(Increase)/decrease in
inventories
|
672
|
|
(149)
|
|
(340)
|
|
(1,071)
|
Increase in accounts
payable
|
245
|
|
2,307
|
|
2,718
|
|
3,428
|
Other accrued
liabilities and operating items, net
|
(122)
|
|
499
|
|
(967)
|
|
293
|
Net cash provided by
operating activities
|
858
|
|
2,992
|
|
2,839
|
|
3,122
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Additions to property
and equipment
|
(217)
|
|
(164)
|
|
(481)
|
|
(387)
|
Proceeds from
divestitures, net of cash sold
|
—
|
|
—
|
|
—
|
|
923
|
Acquisition of
subsidiaries, net of cash acquired
|
—
|
|
(22)
|
|
(10)
|
|
(22)
|
Proceeds from disposal
of property and equipment
|
10
|
|
20
|
|
12
|
|
31
|
Purchase of other
investments
|
(1)
|
|
(40)
|
|
(7)
|
|
(78)
|
Proceeds from sale of
investments
|
2
|
|
2
|
|
3
|
|
29
|
Proceeds from net
investment hedge terminations
|
—
|
|
—
|
|
29
|
|
71
|
Net cash provided
by/(used in) investing activities
|
(206)
|
|
(204)
|
|
(454)
|
|
567
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Purchase of
noncontrolling interests
|
(3)
|
|
—
|
|
(3)
|
|
—
|
Reduction of long-term
obligations
|
(8)
|
|
(288)
|
|
(579)
|
|
(885)
|
Net tax
proceeds/(withholding) from share-based compensation
|
45
|
|
7
|
|
56
|
|
(19)
|
Dividends on common
shares
|
(126)
|
|
(134)
|
|
(525)
|
|
(559)
|
Purchase of treasury
shares
|
(500)
|
|
—
|
|
(2,000)
|
|
(1,000)
|
Net cash used in
financing activities
|
(592)
|
|
(415)
|
|
(3,051)
|
|
(2,463)
|
|
|
|
|
|
|
|
|
Effect of exchange
rates changes on cash and equivalents
|
(7)
|
|
(12)
|
|
(8)
|
|
(25)
|
Cash reclassified from
assets held for sale
|
—
|
|
—
|
|
—
|
|
109
|
|
|
|
|
|
|
|
|
Net increase/(decrease)
in cash and equivalents
|
53
|
|
2,361
|
|
(674)
|
|
1,310
|
Cash and equivalents at
beginning of period
|
3,990
|
|
2,356
|
|
4,717
|
|
3,407
|
Cash and
equivalents at end of period
|
$
4,043
|
|
$
4,717
|
|
$
4,043
|
|
$
4,717
|
Schedule
4
|
Cardinal Health,
Inc. and Subsidiaries
Segment
Information
|
|
Fourth
Quarter
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
2023
|
|
2022
|
|
(in
millions)
|
2023
|
|
2022
|
Pharmaceutical
|
|
|
|
|
Medical
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
Revenue
|
|
|
|
Amount
|
$
49,699
|
|
$
43,337
|
|
Amount
|
$
3,755
|
|
$
3,769
|
Growth rate
|
15 %
|
|
13 %
|
|
Growth rate
|
— %
|
|
(11) %
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
|
|
|
Segment
profit
|
|
|
|
Amount
|
$
504
|
|
$
451
|
|
Amount
|
$
82
|
|
$
(16)
|
Growth rate
|
12 %
|
|
26 %
|
|
Growth rate
|
N.M.
|
|
75 %
|
Segment profit
margin
|
1.01 %
|
|
1.04 %
|
|
Segment profit
margin
|
2.18 %
|
|
(0.42) %
|
Fiscal
Year
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
2023
|
|
2022
|
|
(in
millions)
|
2023
|
|
2022
|
Pharmaceutical
|
|
|
|
|
Medical
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
Revenue
|
|
|
|
Amount
|
$ 190,009
|
|
$ 165,491
|
|
Amount
|
$
15,014
|
|
$
15,887
|
Growth rate
|
15 %
|
|
14 %
|
|
Growth rate
|
(5) %
|
|
(5) %
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
|
|
|
Segment
profit
|
|
|
|
Amount
|
$
1,999
|
|
$
1,770
|
|
Amount
|
$
111
|
|
$
216
|
Growth rate
|
13 %
|
|
5 %
|
|
Growth rate
|
(49) %
|
|
(63) %
|
Segment profit
margin
|
1.05 %
|
|
1.07 %
|
|
Segment profit
margin
|
0.74 %
|
|
1.36 %
|
|
The sum of the
components and certain computations may reflect rounding
adjustments.
|
Schedule
5
|
Cardinal Health,
Inc. and Subsidiaries
GAAP / Non-GAAP
Reconciliation1
|
|
|
|
|
|
|
|
|
|
Earnings/
|
|
|
|
|
|
|
|
|
Gross
|
|
|
|
Operating
|
(Loss)
|
Provision
for/
|
|
Net
|
|
|
Diluted
|
|
|
Margin
|
|
SG&A2
|
|
Earnings
|
Before
|
(Benefit
from)
|
Net
|
Earnings3
|
Effective
|
|
EPS
3
|
(in millions, except
per common share
amounts)
|
Gross
|
Growth
|
|
Growth
|
Operating
|
Growth
|
Income
|
Income
|
Earnings/
|
Growth
|
Tax
|
Diluted
|
Growth
|
Margin
|
Rate
|
SG&A
2
|
Rate
|
Earnings
|
Rate
|
Taxes
|
Taxes
|
(Loss)
3
|
Rate
|
Rate
|
EPS
3,4
|
Rate
|
Fourth Quarter
2023
|
GAAP
|
$
1,827
|
14 %
|
$
1,267
|
10 %
|
$
137
|
N.M.
|
$
121
|
$
187
|
$
(64)
|
N.M.
|
154.3 %
|
$
(0.25)
|
N.M.
|
Restructuring
and employee severance
|
—
|
|
—
|
|
33
|
|
33
|
7
|
26
|
|
|
0.10
|
|
Amortization and
other acquisition-related
costs
|
—
|
|
—
|
|
69
|
|
69
|
18
|
51
|
|
|
0.20
|
|
Impairments and
(gain)/loss on disposal of
assets, net 5
|
—
|
|
—
|
|
367
|
|
367
|
(51)
|
418
|
|
|
1.64
|
|
Litigation
(recoveries)/charges,
net
|
—
|
|
—
|
|
(46)
|
|
(46)
|
(12)
|
(34)
|
|
|
(0.14)
|
|
Non-GAAP
|
$
1,827
|
14 %
|
$
1,267
|
10 %
|
$
560
|
24 %
|
$
544
|
$
149
|
$
397
|
37 %
|
27.4 %
|
$
1.55
|
48 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
2022
|
GAAP
|
$
1,605
|
9 %
|
$
1,155
|
2 %
|
$
36
|
(78) %
|
$ (28)
|
$
(165)
|
$
138
|
19 %
|
575.3 %
|
$
0.50
|
25 %
|
Restructuring
and employee severance
|
—
|
|
—
|
|
45
|
|
45
|
13
|
32
|
|
|
0.12
|
|
Amortization and
other acquisition-related
costs
|
—
|
|
—
|
|
87
|
|
87
|
22
|
65
|
|
|
0.23
|
|
Impairments and
(gain)/loss on disposal of
assets, net 5
|
—
|
|
—
|
|
286
|
|
286
|
226
|
60
|
|
|
0.22
|
|
Litigation
(recoveries)/charges,
net
|
—
|
|
—
|
|
(4)
|
|
(4)
|
2
|
(6)
|
|
|
(0.02)
|
|
Non-GAAP
|
$
1,605
|
11 %
|
$
1,155
|
2 %
|
$ 450
|
41 %
|
$ 386
|
$
98
|
$
289
|
27 %
|
25.4 %
|
$
1.05
|
36 %
|
|
|
1
|
For more information on
these measures, refer to the Use of Non-GAAP Measures and
Definitions schedules.
|
2
|
Distribution, selling,
general and administrative expenses.
|
3
|
Attributable to
Cardinal Health, Inc.
|
4
|
For the three months
ended June 30, 2023, GAAP diluted loss per share attributable to
Cardinal Health, Inc. ("GAAP diluted EPS") and the EPS impact from
the GAAP to non-GAAP per share reconciling items are calculated
using a weighted average of 254 million common shares, which
excludes potentially dilutive securities from the denominator due
to their anti-dilutive effects resulting from our GAAP net loss for
the period. For the three months ended June 30, 2023, non-GAAP
diluted EPS is calculated using a weighted average of 256 million
common shares, which includes potentially dilutive
shares.
|
5
|
Impairments and
(gain)/loss on disposals of assets, net includes a pre-tax goodwill
impairment charge of $368 million related to our Medical segment
recorded during the three months ended June 30, 2023. The net tax
expense during the three months ended June 30, 2023 related to
goodwill impairment charges is $52 million, which includes a
reversal of the incremental tax benefit recognized during the nine
months ended March 31, 2023. Impairments and (gain)/loss on
disposal of assets, net includes a pre-tax goodwill impairment
charge of $303 million related to our Medical segment recorded
during the three months ended June 30, 2022. For the three months
ended June 30, 2022, the net tax benefit related to cumulative
goodwill impairment charges was $240 million.
|
The sum of the
components and certain computations may reflect rounding
adjustments.
|
We generally apply
varying tax rates depending on the item's nature and tax
jurisdiction where it is incurred.
|
Schedule
5
|
Cardinal Health,
Inc. and Subsidiaries
GAAP / Non-GAAP
Reconciliation1
|
|
|
|
|
|
|
|
|
Earnings/
|
|
|
|
|
|
|
|
|
Gross
|
|
|
|
Operating
|
(Loss)
|
|
|
Net
|
|
|
Diluted
|
|
|
Margin
|
|
SG&A2
|
Operating
|
Earnings
|
Before
|
Provision
for
|
Net
|
Earnings3
|
Effective
|
|
EPS
3
|
|
Gross
|
Growth
|
|
Growth
|
Earnings/
|
Growth
|
Income
|
Income
|
Earnings/
|
Growth
|
Tax
|
Diluted
|
Growth
|
(in millions, except
per common share
amounts)
|
Margin
|
Rate
|
SG&A
2
|
Rate
|
(Loss)
|
Rate
|
Taxes
|
Taxes
|
(Loss)
3
|
Rate
|
Rate
|
EPS
3,4
|
Rate
|
Fiscal Year
2023
|
GAAP
|
$
6,889
|
5 %
|
$
4,834
|
6 %
|
$
727
|
N.M.
|
$
638
|
$
376
|
$
261
|
N.M.
|
58.9 %
|
$
1.00
|
N.M.
|
State opioid
assessment related to prior fiscal
years
|
—
|
|
6
|
|
(6)
|
|
(6)
|
(2)
|
(4)
|
|
|
(0.02)
|
|
Shareholder
cooperation agreement
costs
|
—
|
|
(8)
|
|
8
|
|
8
|
2
|
6
|
|
|
0.02
|
|
Restructuring
and employee severance
|
—
|
|
—
|
|
95
|
|
95
|
21
|
74
|
|
|
0.28
|
|
Amortization and
other acquisition-related
costs
|
—
|
|
—
|
|
285
|
|
285
|
74
|
211
|
|
|
0.80
|
|
Impairments and
(gain)/loss on disposal of
assets, net 5
|
—
|
|
—
|
|
1,250
|
|
1,250
|
86
|
1,164
|
|
|
4.44
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
(302)
|
|
(302)
|
(109)
|
(193)
|
|
|
(0.73)
|
|
Non-GAAP
|
$
6,889
|
5 %
|
$
4,832
|
6 %
|
$
2,057
|
3 %
|
$ 1,968
|
$
448
|
$
1,519
|
7 %
|
22.8 %
|
$
5.79
|
14 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
2022
|
GAAP
|
$
6,545
|
(3) %
|
$
4,557
|
1 %
|
$
(596)
|
N.M.
|
$ (769)
|
$
163
|
$
(933)
|
N.M.
|
(21.2) %
|
$
(3.35)
|
N.M.
|
Surgical gown recall
costs/(income)
|
1
|
|
—
|
|
1
|
|
1
|
—
|
1
|
|
|
—
|
|
Restructuring and
employee severance
|
—
|
|
—
|
|
101
|
|
101
|
26
|
75
|
|
|
0.27
|
|
Amortization and other
acquisition-related costs
|
—
|
|
—
|
|
324
|
|
324
|
84
|
240
|
|
|
0.87
|
|
Impairments and
(gain)/loss on disposal of assets, net 5
|
—
|
|
—
|
|
2,050
|
|
2,050
|
107
|
1,943
|
|
|
6.93
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
—
|
|
109
|
|
109
|
21
|
88
|
|
|
0.31
|
|
Loss on early
extinguishment of debt
|
—
|
|
—
|
|
—
|
|
10
|
3
|
7
|
|
|
0.03
|
|
(Gain)/Loss on sale of
equity interest in naviHealth
|
—
|
|
—
|
|
—
|
|
(2)
|
—
|
(2)
|
|
|
—
|
|
Non-GAAP
|
$
6,547
|
(3) %
|
$
4,557
|
1 %
|
$ 1,990
|
(12) %
|
$ 1,824
|
$
404
|
$ 1,419
|
(13) %
|
22.1 %
|
$
5.06
|
(9) %
|
|
|
1
|
For more information on
these measures, refer to the Use of Non-GAAP Measures and
Definitions schedules.
|
2
|
Distribution, selling,
general and administrative expenses.
|
3
|
Attributable to
Cardinal Health, Inc.
|
4
|
For fiscal 2022, GAAP
diluted loss per share attributable to Cardinal Health, Inc. ("GAAP
diluted EPS") and the EPS impact from the GAAP to non-GAAP per
share reconciling items are calculated using a weighted average of
279 million common shares, which excludes potentially dilutive
securities from the denominator due to their anti-dilutive effects
resulting from our GAAP net loss for the period. For fiscal 2022,
non-GAAP diluted EPS is calculated using a weighted average of
280 million common shares, which includes potentially dilutive
shares.
|
5
|
Impairments and
(gain)/loss on disposals of assets, net includes pre-tax goodwill
impairment charges of $1.2 billion and $2.1 billion related to
our Medical segment recorded in fiscal 2023 and 2022, respectively.
For fiscal 2023 and 2022, the net tax benefits related to these
impairments were $82 million and $150 million,
respectively, and were included in the annual effective tax
rate.
|
The sum of the
components and certain computations may reflect rounding
adjustments.
|
We generally apply
varying tax rates depending on the item's nature and tax
jurisdiction where it is incurred.
|
Schedule
6
|
Cardinal Health,
Inc. and Subsidiaries
GAAP / Non-GAAP
Reconciliation - GAAP Cash Flow to Non-GAAP Adjusted Free Cash
Flow
|
|
|
Fiscal
Year
|
|
Fiscal
Year
|
(in
millions)
|
2023
|
|
2022
|
GAAP - Cash Flow
Categories
|
|
|
|
Net cash provided by
operating activities
|
$
2,839
|
|
$
3,122
|
Net cash provided
by/(used in) investing activities
|
(454)
|
|
567
|
Net cash used in
financing activities
|
(3,051)
|
|
(2,463)
|
Effect of exchange
rates changes on cash and equivalents
|
(8)
|
|
(25)
|
Cash reclassified from
assets held for sale
|
—
|
|
109
|
Net increase/(decrease)
in cash and equivalents
|
$
(674)
|
|
$
1,310
|
|
|
|
|
Non-GAAP Adjusted
Free Cash Flow
|
|
|
|
Net cash provided by
operating activities
|
$
2,839
|
|
$
3,122
|
Additions to property
and equipment
|
(481)
|
|
(387)
|
Payments related to
matters included in litigation (recoveries)/charges, net
|
490
|
|
511
|
Other significant and
unusual or non-recurring items
|
|
|
|
U.S. federal tax
refund from net operating loss carryback
|
—
|
|
(966)
|
|
|
|
|
Non-GAAP Adjusted Free
Cash Flow
|
$
2,848
|
|
$
2,280
|
|
|
|
|
For more information on
these measures, refer to the Use of Non-GAAP Measures and
Definitions schedules.
|
|
|
|
|
|
|
|
Cardinal Health, Inc. and Subsidiaries
Use of Non-GAAP Measures
This earnings release contains financial measures that are not
calculated in accordance with U.S. generally accepted accounting
principles ("GAAP").
In addition to analyzing our business based on financial
information prepared in accordance with GAAP, we use these non-GAAP
financial measures internally to evaluate our performance, engage
in financial and operational planning and determine incentive
compensation because we believe that these measures provide
additional perspective on and, in some circumstances are more
closely correlated to, the performance of our underlying, ongoing
business. We provide these non-GAAP financial measures to investors
as supplemental metrics to assist readers in assessing the effects
of items and events on our financial and operating results on a
year-over-year basis and in comparing our performance to that of
our competitors. However, the non-GAAP financial measures that we
use may be calculated differently from, and therefore may not be
comparable to, similarly titled measures used by other companies.
The non-GAAP financial measures disclosed by us should not be
considered a substitute for, or superior to, financial measures
calculated in accordance with GAAP, and the financial results
calculated in accordance with GAAP and reconciliations to those
financial statements set forth below should be carefully
evaluated.
Exclusions from Non-GAAP Financial Measures
Management believes it is useful to exclude the following items
from the non-GAAP measures presented in this report for its own and
for investors' assessment of the business for the reasons
identified below:
- LIFO charges and credits are excluded because the factors that
drive last-in first-out ("LIFO") inventory charges or credits, such
as pharmaceutical manufacturer price appreciation or deflation and
year-end inventory levels (which can be meaningfully influenced by
customer buying behavior immediately preceding our fiscal
year-end), are largely out of our control and cannot be accurately
predicted. The exclusion of LIFO charges and credits from non-GAAP
metrics facilitates comparison of our current financial results to
our historical financial results and to our peer group companies'
financial results. We did not recognize any LIFO charges or credits
during the periods presented.
- Surgical gown recall costs or income includes inventory
write-offs and certain remediation and supply disruption costs, net
of related insurance recoveries, arising from the January 2020 recall of select Association for the
Advancement of Medical Instrumentation ("AAMI") Level 3 surgical
gowns and voluntary field actions (a recall of some packs and a
corrective action allowing overlabeling of other packs) for
Presource Procedure Packs containing affected gowns. Income from
surgical gown recall costs represents insurance recoveries of these
certain costs. We have excluded these costs from our non-GAAP
metrics to allow investors to better understand the underlying
operating results of the business and to facilitate comparison of
our current financial results to our historical financial results
and to our peer group companies' financial results.
- State opioid assessments related to prior fiscal years is the
portion of state assessments for prescription opioid medications
that were sold or distributed in periods prior to the period in
which the expense is incurred. This portion is excluded from
non-GAAP financial measures because it is retrospectively applied
to sales in prior fiscal years and inclusion would obscure analysis
of the current fiscal year results of our underlying, ongoing
business. Additionally, while states' laws may require us to make
payments on an ongoing basis, the portion of the assessment related
to sales in prior periods are contemplated to be one-time,
nonrecurring items. Income from state opioid assessments related to
prior fiscal years represents reversals of accruals due to changes
in estimates or when the underlying assessments were invalidated by
a Court or reimbursed by manufacturers.
- Shareholder cooperation agreement costs includes costs such as
legal, consulting and other expenses incurred in relation to the
agreement (the "Cooperation Agreement") entered into among Elliott
Associates, L.P., Elliott International, L.P. (together, "Elliott")
and Cardinal Health, including costs incurred to negotiate and
finalize the Cooperation Agreement and costs incurred by the
Business Review Committee of the Board of Directors, which was
formed under this Cooperation Agreement. We have excluded these
costs from our non-GAAP metrics because they do not occur in or
reflect the ordinary course of our ongoing business operations and
may obscure analysis of trends and financial performance.
- Restructuring and employee severance costs are excluded because
they are not part of the ongoing operations of our underlying
business and include, but are not limited to, costs related to
divestitures, closing and consolidating facilities, changing the
way we manufacture or distribute our products, moving manufacturing
of a product to another location, changes in production or business
process outsourcing or insourcing, employee severance and
realigning operations.
- Amortization and other acquisition-related costs, which include
transaction costs, integration costs and changes in the fair value
of contingent consideration obligations, are excluded because they
are not part of the ongoing operations of our underlying business
and to facilitate comparison of our current financial results to
our historical financial results and to our peer group companies'
financial results. Additionally, costs for amortization of
acquisition-related intangible assets are non-cash amounts, which
are variable in amount and frequency and are significantly impacted
by the timing and size of acquisitions, so their exclusion
facilitates comparison of historical, current and forecasted
financial results. We also exclude other acquisition-related costs,
which are directly related to an acquisition but do not meet the
criteria to be recognized on the acquired entity's initial balance
sheet as part of the purchase price allocation. These costs are
also significantly impacted by the timing, complexity and size of
acquisitions.
- Impairments and gain or loss on disposal of assets, net are
excluded because they do not occur in or reflect the ordinary
course of our ongoing business operations and are inherently
unpredictable in timing and amount, and in the case of impairments,
are non-cash amounts, so their exclusion facilitates comparison of
historical, current and forecasted financial results.
- Litigation recoveries or charges, net are excluded because they
often relate to events that may have occurred in prior or multiple
periods, do not occur in or reflect the ordinary course of our
business and are inherently unpredictable in timing and amount.
During fiscal 2022, we incurred a one-time contingent attorneys'
fee of $18 million related to the
finalization of the settlement agreement (the "National Opioid
Settlement Agreement") resulting in the settlement of the vast
majority of opioid lawsuits filed by state and local governmental
entities. Due to the unique nature and significance of the National
Opioid Settlement Agreement, and the one-time, contingent nature of
the fee, this fee was included in litigation recoveries or charges,
net. Additionally, during fiscal 2022 our Pharmaceutical segment
profit was positively impacted by a $16
million judgment for lost profits. This judgment was the
result of an ordinary course intellectual property rights claim
and, therefore, is not adjusted in calculating the litigation
recoveries or charges, net adjustment. During fiscal 2021, we
incurred a tax benefit related to a carryback of a net operating
loss. Some pre-tax amounts, which contributed to this loss, relate
to litigation charges. As a result, we allocated substantially all
of the tax benefit to litigation charges.
- Loss on early extinguishment of debt is excluded because it
does not typically occur in the normal course of business and may
obscure analysis of trends and financial performance. Additionally,
the amount and frequency of this type of charge is not consistent
and is significantly impacted by the timing and size of debt
extinguishment transactions.
- (Gain)/Loss on sale of equity interest in naviHealth was
incurred in connection with the sale of our remaining equity
interest in naviHealth in fiscal 2020. The equity interest was
retained in connection with the initial sale of our majority
interest in naviHealth during fiscal 2019. We exclude this
significant gain because gains or losses on investments of this
magnitude do not typically occur in the normal course of business
and are similar in nature to a gain or loss from a divestiture of a
majority interest, which we exclude from non-GAAP results. The gain
on the initial sale of our majority interest in naviHealth in
fiscal 2019 was also excluded from our non-GAAP measures.
The tax effect for each of the items listed above is determined
using the tax rate and other tax attributes applicable to the item
and the jurisdiction(s) in which the item is recorded. The gross,
tax and net impact of each item are presented with our GAAP to
non-GAAP reconciliations.
Non-GAAP adjusted free cash flow: We provide this non-GAAP
financial measure as a supplemental metric to assist readers in
assessing the effects of items and events on our cash flow on a
year-over-year basis and in comparing our performance to that of
our peer group companies. In calculating this non-GAAP metric,
certain items are excluded from net cash provided by operating
activities because they relate to significant and unusual or
non-recurring events and are inherently unpredictable in timing and
amount. We believe adjusted free cash flow is important to
management and useful to investors as a supplemental measure as it
indicates the cash flow available for working capital needs, debt
repayments, dividend payments, share repurchases, strategic
acquisitions, or other strategic uses of cash. A reconciliation of
our GAAP financial results to Non-GAAP adjusted free cash flow is
provided in Schedule 6 of the financial statement tables included
with this release.
Forward Looking Non-GAAP Measures
In this document, the Company presents certain forward-looking
non-GAAP metrics. The Company does not provide outlook on a GAAP
basis because the items that the Company excludes from GAAP to
calculate the comparable non-GAAP measure can be dependent on
future events that are less capable of being controlled or reliably
predicted by management and are not part of the Company's routine
operating activities. Additionally, management does not forecast
many of the excluded items for internal use and therefore cannot
create or rely on outlook done on a GAAP basis.
The occurrence, timing and amount of any of the items excluded
from GAAP to calculate non-GAAP could significantly impact the
Company's fiscal 2024 GAAP results. Over the past five fiscal
years, the excluded items have impacted the Company's EPS from
$0.75 to $18.06, which includes a $17.54 charge related to the opioid litigation we
recognized in fiscal 2020.
Definitions
Growth rate calculation: growth rates in this report
are determined by dividing the difference between current-period
results and prior-period results by prior-period results.
Interest and Other, net: other (income)/expense, net plus
interest expense, net.
Segment Profit: segment revenue minus (segment cost
of products sold and segment distribution, selling, general and
administrative expenses).
Segment Profit margin: segment profit divided by segment
revenue.
Non-GAAP gross margin: gross margin, excluding LIFO
charges/(credits) and surgical gown recall costs/(income).
Non-GAAP distribution, selling, general and administrative
expenses or Non-GAAP SG&A: distribution, selling, general
and administrative expenses, excluding surgical gown recall
costs/(income), state opioid assessment related to prior fiscal
years and shareholder cooperation agreement costs.
Non-GAAP operating earnings: operating earnings/(loss)
excluding (1) LIFO charges/(credits), (2) surgical gown recall
costs/(income), (3) state opioid assessment related to prior fiscal
years, (4) shareholder cooperation agreement costs, (5)
restructuring and employee severance, (6) amortization and other
acquisition-related costs, (7) impairments and (gain)/loss on
disposal of assets, net and (8) litigation (recoveries)/charges,
net.
Non-GAAP earnings before income taxes: earnings/(loss)
before income taxes excluding (1) LIFO charges/(credits), (2)
surgical gown recall costs/(income), (3) state opioid assessment
related to prior fiscal years, (4) shareholder cooperation
agreement costs, (5) restructuring and employee severance, (6)
amortization and other acquisition-related costs, (7) impairments
and (gain)/loss on disposal of assets, net, (8) litigation
(recoveries)/charges, net, (9) loss on early extinguishment of debt
and (10) (gain)/loss on sale of equity interest in
naviHealth.
Non-GAAP net earnings attributable to Cardinal Health,
Inc.: net earnings/(loss) attributable to Cardinal Health, Inc.
excluding (1) LIFO charges/(credits), (2) surgical gown recall
costs/(income), (3) state opioid assessment related to prior fiscal
years, (4) shareholder cooperation agreement costs, (5)
restructuring and employee severance, (6) amortization and other
acquisition-related costs, (7) impairments and (gain)/loss on
disposal of assets, net, (8) litigation (recoveries)/charges, net,
(9) loss on early extinguishment of debt and (10) (gain)/loss on
sale of equity interest in naviHealth, each net of tax.
Non-GAAP effective tax rate: provision for/(benefit from)
income taxes adjusted for the tax impacts of (1) LIFO
charges/(credits), (2) surgical gown recall costs/(income), (3)
state opioid assessment related to prior fiscal years, (4)
shareholder cooperation agreement costs, (5) restructuring and
employee severance, (6) amortization and other acquisition-related
costs, (7) impairments and (gain)/loss on disposal of assets, net,
(8) litigation (recoveries)/charges, net, (9) loss on early
extinguishment of debt and (10) (gain)/loss on sale of equity
interest in naviHealth divided by (earnings before income taxes
adjusted for the ten items above).
Non-GAAP diluted earnings per share attributable to Cardinal
Health, Inc.: non-GAAP net earnings attributable to Cardinal
Health, Inc. divided by diluted weighted-average shares
outstanding.
Non-GAAP adjusted free cash flow: net cash provided by
operating activities less payments related to additions to property
and equipment, excluding settlement payments and receipts related
to matters included in litigation (recoveries)/charges, net, as
defined above, or other significant and unusual or non-recurring
cash payments or receipts. For example, the U.S. federal income tax
refund of $966 million for the tax benefit from the net
operating loss carryback related to a self-insurance pre-tax loss
was excluded from the Company's fiscal 2022 non-GAAP adjusted free
cash flow.
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SOURCE Cardinal Health