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