DUBLIN, Ohio, Aug. 5, 2021 /PRNewswire/ -- Cardinal Health
(NYSE: CAH) today reported that fourth-quarter fiscal 2021 revenue
increased 16% to $42.6 billion. This
increase includes the favorable prior year comparison from reduced
pharmaceutical demand related to COVID-19. Fiscal year 2021
revenues were $162.5 billion, a 6%
increase from fiscal year 2020.
Both GAAP and Non-GAAP operating earnings during the fourth
quarter and fiscal year 2021 were adversely impacted by a
$197 million COVID-19-related
inventory reserve related to certain Personal Protective Equipment
(PPE) in the Medical segment. Fourth-quarter and full year GAAP
diluted earnings per share (EPS) were also negatively impacted by
$149 million and $1.17 billion pre-tax charges, respectively,
related to opioid lawsuits brought by states and local governmental
entities.
Fourth-quarter GAAP operating earnings decreased 40% to
$162 million and GAAP diluted EPS
decreased to $0.40. Non-GAAP
operating earnings decreased 28% to $320
million and Non-GAAP diluted EPS decreased 26% to
$0.77 in the quarter.
Fiscal year 2021 GAAP operating earnings were $472 million and non-GAAP operating earnings
decreased 5% to $2.3 billion. GAAP
diluted EPS for fiscal year 2021 were $2.08, while non-GAAP diluted EPS were
$5.57.
"We're disappointed with our fourth quarter results. Throughout
the past year we have been taking action to drive performance, and
we will continue to move forward with urgency," said Mike Kaufmann, CEO of Cardinal Health. "For
example, we divested the Cordis business, extended our Red Oak
Sourcing agreement with CVS Health, identified $250 million of additional cost savings
opportunities and made important leadership changes. With the
actions we've taken to date and our plans for fiscal year 2022, we
feel confident in our strategy, and are encouraged by the tailwinds
behind our growth areas and strong cash flow generation."
Q4 and full year FY21 summary
|
Q4
FY21
|
|
Q4 FY20
|
|
Y/Y
|
|
FY21
|
|
FY20
|
|
Y/Y
|
Revenue
|
$42.6
billion
|
|
$36.7
billion
|
|
16%
|
|
$162.5
billion
|
|
$152.9
billion
|
|
6%
|
Operating
earnings/(loss)
|
$162
million
|
|
$270
million
|
|
(40)%
|
|
$472
million
|
|
$(4.1)
billion
|
|
N.M
|
Non-GAAP operating
earnings
|
$320
million
|
|
$442
million
|
|
(28)%
|
|
$2.3
billion
|
|
$2.4
billion
|
|
(5)%
|
Net earnings/(loss)
attributable to Cardinal Health, Inc.
|
$116
million
|
|
$656
million
|
|
N.M.
|
|
$611
million
|
|
$(3.7)
billion
|
|
N.M.
|
Non-GAAP net earnings
attributable to Cardinal Health, Inc.
|
$227
million
|
|
$305
million
|
|
(26)%
|
|
$1.6
billion
|
|
$1.6
billion
|
|
2%
|
Effective Tax
Rate
|
2.6%
|
|
19.4%
|
|
|
|
(89.7)%
|
|
2.1%
|
|
|
Non-GAAP Effective
Tax Rate
|
22.6%
|
|
26.4%
|
|
|
|
22.8%
|
|
25.1 %
|
|
|
Diluted EPS
attributable to Cardinal Health, Inc.
|
$0.40
|
|
$2.23
|
|
N.M.
|
|
$2.08
|
|
$(12.61)
|
|
N.M.
|
Non-GAAP diluted EPS
attributable to Cardinal Health, Inc.
|
$0.77
|
|
$1.04
|
|
(26)%
|
|
$5.57
|
|
$5.45
|
|
2%
|
COVID-19
The COVID-19 pandemic adversely affected
fiscal year 2021 results. The company estimates that COVID-19 had a
total net negative impact to both GAAP and non-GAAP operating
earnings of approximately $300
million in fiscal year 2021, or approximately $200 million on a year-over-year basis.
Segment results
Pharmaceutical segment
|
Q4
FY21
|
|
Q4 FY20
|
|
Y/Y
|
|
FY21
|
|
FY20
|
|
Y/Y
|
Revenue
|
$
|
38.3
|
billion
|
|
$
|
33.2
|
billion
|
|
15%
|
|
$
|
145.8
|
billion
|
|
$
|
137.5
|
billion
|
|
6%
|
Segment
profit
|
$
|
358
|
million
|
|
$
|
359
|
million
|
|
—%
|
|
$
|
1,684
|
million
|
|
$
|
1,753
|
million
|
|
(4)%
|
Fourth-quarter revenue for the Pharmaceutical segment increased
15% to $38.3 billion driven primarily
by sales growth from large Pharmaceutical Distribution and
Specialty Solutions customers. This increase also includes the
favorable prior year comparison from reduced pharmaceutical demand
related to COVID-19.
Pharmaceutical segment profit was flat at $358 million in the fourth quarter. This
reflects COVID-19-related volume recovery in the Nuclear and
Precision Health Solutions business, offset by the adverse impact
of Pharmaceutical Distribution customer contract renewals.
Medical segment
|
Q4
FY21
|
|
Q4 FY20
|
|
Y/Y
|
|
FY21
|
|
FY20
|
|
Y/Y
|
Revenue
|
$
|
4.2
|
billion
|
|
$
|
3.5
|
billion
|
|
23%
|
|
$
|
16.7
|
billion
|
|
$
|
15.4
|
billion
|
|
8%
|
Segment
profit
|
$
|
(63)
|
million
|
|
$
|
120
|
million
|
|
(153)%
|
|
$
|
577
|
million
|
|
$
|
663
|
million
|
|
(13)%
|
Fourth-quarter revenue for the Medical segment increased 23% to
$4.2 billion, driven by a net
positive impact from COVID-19 on products and distribution. This
increase was primarily due to a recovery in elective procedure
volumes and the positive pricing impact of PPE.
Medical segment loss of $63
million in the fourth quarter was due to an adverse impact
from COVID-19. This was primarily due to an inventory reserve
on certain PPE products, partially offset by a recovery in elective
procedure volumes. Additionally, benefits from cost savings
initiatives were offset by elevated supply chain costs.
Tax rate
The GAAP effective tax rates for the fourth
quarter of fiscal year 2021, fiscal year 2021 and fiscal year 2020
included net tax benefits related to the treatment of the tax
impacts of the opioid litigation charges. Included in the GAAP
effective tax rate for fiscal 2021 was a benefit from the net
operating loss carryback primarily related to a self-insurance
pre-tax loss.
Fiscal year 2022 outlook1
Non-GAAP earnings per
share
|
$5.60 -
$5.90
|
Interest and
other
|
$150M -
$180M
|
Non-GAAP effective
tax rate
|
23.5% -
25.5%
|
Diluted weighted
average shares
outstanding
|
287M -
292M
|
Capital
Expenditures
|
$400M -
$450M
|
Fiscal year 2022 non-GAAP EPS guidance reflects a net tailwind
related to COVID-19 of approximately $200
million compared to the prior year. Additionally, the
company expects incremental investments of approximately
$120 million in technology
enhancements to drive growth and efficiencies, as well as an
approximate $80 million negative
impact to operating earnings due to the Cordis divestiture. Fiscal
year 2022 non-GAAP EPS guidance reflects share repurchases in the
range of $500 million to $1.0 billion.
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.
Recent highlights
- Cardinal Health amended its Red Oak Sourcing agreement with CVS
Health to extend the term of the generic pharmaceutical sourcing
venture through June 2029.
- Cardinal Health announced the completion of the previously
announced sale of Cardinal Health's Cordis business to Hellman
& Friedman for a sale price of approximately $1 billion.
- Cardinal Health, along with pharmaceutical distribution peers,
announced that they have negotiated a comprehensive proposed
settlement agreement which, if all conditions are satisfied, would
result in the settlement of a substantial majority of opioid
lawsuits filed by state and local governmental entities.
- Cardinal Health Board of Directors approved a quarterly
dividend of $0.4908 per share. The
dividend will be payable on October 15,
2021 to shareholders of record at the close of business on
October 1, 2021.
- Cardinal Health has been named one of the 2021 Best Companies
for Multicultural Women by Seramount (formerly Working Mother
Media), an honor recognizing companies that create and use best
practices in hiring, retaining and promoting multicultural women in
the United States.
Upcoming webcasted investor events
- Morgan Stanley 19th Annual Global Healthcare Conference at
8:00 a.m. Eastern, September 14, 2021
Webcast
Cardinal Health will host a webcast today at
8:30 a.m. Eastern to discuss
fourth-quarter 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 5, 2022.
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 healthcare facilities. With 50
years in business, operations in more than 40 countries and
approximately 48,000 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
847.887.1487
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.
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 the
ongoing COVID-19 pandemic and our critical role in the global
healthcare supply chain including ongoing volume reductions in our
generics program, our ability to recoup or mitigate cost increases
to source certain personal protective or other equipment or reduced
price or demand for such personal protective equipment resulting in
additional inventory reserves, and the possible impact of
disruptions of our distribution or manufacturing facilities;
competitive pressures in Cardinal Health's various lines of
business; 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 with CVS Health;
risks associated with the distribution of opioids, including the
financial impact associated with the proposed settlement agreement
and process we have negotiated with governmental authorities,
including the risk that we may fail to reach a final settlement
agreement or that a significant number of states and subdivisions
may not agree to sign on the proposed settlement agreement, and the
risk that challenges to our plans to take tax deductions for
opioid-related losses could adversely impact our financial results;
risks associated with the manufacture and sourcing of certain
products, including risks related to our ability and the ability of
third-party manufacturers to comply with applicable regulations;
our ability to manage uncertainties associated with the pricing of
branded pharmaceuticals; and risks associated with our cost savings
initiatives. 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 5, 2021. Except to the extent required by
applicable law, Cardinal Health undertakes no obligation to update
or revise any forward-looking statement. 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)
|
2021
|
|
2020
|
|
%
Change
|
|
2021
|
|
2020
|
|
%
Change
|
Revenue
|
$
|
42,586
|
|
|
$
|
36,689
|
|
|
16
|
%
|
|
$
|
162,467
|
|
|
$
|
152,922
|
|
|
6
|
%
|
Cost of products
sold
|
41,111
|
|
|
35,099
|
|
|
17
|
%
|
|
155,689
|
|
|
146,054
|
|
|
7
|
%
|
Gross
margin
|
1,475
|
|
|
1,590
|
|
|
(7)
|
%
|
|
6,778
|
|
|
6,868
|
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution,
selling, general and administrative expenses
|
1,129
|
|
|
1,137
|
|
|
(1)
|
%
|
|
4,533
|
|
|
4,572
|
|
|
(1)
|
%
|
Restructuring and
employee severance
|
33
|
|
|
42
|
|
|
|
|
114
|
|
|
122
|
|
|
|
Amortization and
other acquisition-related costs
|
106
|
|
|
129
|
|
|
|
|
451
|
|
|
524
|
|
|
|
Impairments and
(gain)/loss on disposal of assets, net
|
1
|
|
|
—
|
|
|
|
|
79
|
|
|
7
|
|
|
|
Litigation
(recoveries)/charges, net 1
|
44
|
|
|
12
|
|
|
|
|
1,129
|
|
|
5,741
|
|
|
|
Operating
earnings/(loss)
|
162
|
|
|
270
|
|
|
(40)
|
%
|
|
472
|
|
|
(4,098)
|
|
|
N.M
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
(income)/expense, net
|
(16)
|
|
|
(22)
|
|
|
|
|
(47)
|
|
|
(1)
|
|
|
|
Interest expense,
net
|
44
|
|
|
49
|
|
|
(10)
|
%
|
|
180
|
|
|
238
|
|
|
(24)
|
%
|
Loss on early
extinguishment of debt
|
13
|
|
|
7
|
|
|
|
|
14
|
|
|
16
|
|
|
|
(Gain)/Loss on sale
of equity interest in naviHealth2
|
2
|
|
|
(579)
|
|
|
|
|
2
|
|
|
(579)
|
|
|
|
Earnings/(loss) before
income taxes
|
119
|
|
|
815
|
|
|
(85)
|
%
|
|
323
|
|
|
(3,772)
|
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for/(benefit from) income taxes 3
|
4
|
|
|
158
|
|
|
N.M.
|
|
|
(289)
|
|
|
(79)
|
|
|
N.M.
|
|
Net
earnings/(loss)
|
115
|
|
|
657
|
|
|
N.M.
|
|
|
612
|
|
|
(3,693)
|
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net earnings
attributable to noncontrolling interests
|
1
|
|
|
(1)
|
|
|
|
|
(1)
|
|
|
(3)
|
|
|
|
Net earnings/(loss)
attributable to Cardinal Health, Inc.
|
$
|
116
|
|
|
$
|
656
|
|
|
N.M.
|
|
|
$
|
611
|
|
|
$
|
(3,696)
|
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss)
per common share attributable to Cardinal Health,
Inc.:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.40
|
|
|
$
|
2.25
|
|
|
N.M.
|
|
|
$
|
2.09
|
|
|
$
|
(12.61)
|
|
|
N.M.
|
|
Diluted
|
0.40
|
|
|
2.23
|
|
|
N.M.
|
|
|
2.08
|
|
|
(12.61)
|
4
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
290
|
|
292
|
|
|
|
|
292
|
|
|
293
|
|
|
|
Diluted
|
293
|
|
294
|
|
|
|
|
294
|
|
|
293
|
4
|
|
|
1Litigation (recoveries)/charges, net includes
pre-tax charges of $1.17 billion and
$5.63 billion recorded in fiscal 2021
and 2020, respectively, related to the opioid litigation. During
three months ended June 30, 2021,
pre-tax charges of $149 million were
recorded related to the opioid litigation.
2 In the four quarter of fiscal 2020, we recognized a
$579 million pre-tax gain
($493 million after tax) in
connection with the sale of our remaining equity interest in a
partnership that owned 100 percent of naviHealth.
3 Provision for/(benefit from) income taxes includes
a tax benefit recorded during fiscal 2021 related to a net
operating loss carryback. Our wholly-owned insurance subsidiary
recorded a self-insurance pre-tax loss in its fiscal 2020 statutory
financial statements primarily related to opioid litigation. This
self-insurance pre-tax loss, which did not impact our pre-tax
consolidated results, was deducted on our fiscal 2020 consolidated
federal income tax return and contributed to a significant net
operating loss for tax purposes. The net operating loss was carried
back and adjusted our taxable income for fiscal 2015, 2016, 2017
and 2018 as permitted under the Coronavirus Aid, Relief and
Economic Security ("CARES") Act. The total benefit from the net
operating loss carryback was $424
million.
In addition, the amount of tax benefit increased by
approximately $50 million during the
three months ended June 30, 2021
compared to the tax impacts that would have been recognized without
the opioid litigation charge. The net tax benefits associated with
the opioid litigation charges are $228
million and $488 million for
fiscal 2021 and 2020, respectively.
4Due to the net loss during fiscal 2020, potentially
dilutive common shares have not been included in the denominator of
the dilutive per share computation due to their anti-dilutive
effect.
Schedule
2
|
|
Cardinal Health,
Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(in
millions)
|
June 30,
2021
|
|
June 30,
2020
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and
equivalents
|
$
|
3,407
|
|
|
$
|
2,771
|
|
Trade receivables,
net
|
9,103
|
|
|
8,264
|
|
Inventories,
net
|
14,594
|
|
|
13,198
|
|
Prepaid expenses and
other
|
2,843
|
|
|
1,707
|
|
Assets held for
sale
|
1,101
|
|
|
—
|
|
Total current
assets
|
31,048
|
|
|
25,940
|
|
|
|
|
|
Property and
equipment, net
|
2,360
|
|
|
2,366
|
|
Goodwill and other
intangibles, net
|
10,094
|
|
|
11,275
|
|
Other
assets
|
951
|
|
|
1,185
|
|
Total
assets
|
$
|
44,453
|
|
|
$
|
40,766
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
23,700
|
|
|
$
|
21,374
|
|
Current portion of
long-term obligations and other short-term borrowings
|
871
|
|
|
10
|
|
Other accrued
liabilities
|
2,957
|
|
|
2,231
|
|
Liabilities related
to assets held for sale
|
96
|
|
|
—
|
|
Total current
liabilities
|
27,624
|
|
|
23,615
|
|
|
|
|
|
Long-term
obligations, less current portion
|
5,365
|
|
|
6,765
|
|
Deferred income taxes
and other liabilities
|
9,670
|
|
|
8,594
|
|
|
|
|
|
Total shareholders'
equity
|
1,794
|
|
|
1,792
|
|
Total liabilities
and shareholders' equity
|
$
|
44,453
|
|
|
$
|
40,766
|
|
Schedule
3
|
|
Cardinal Health,
Inc. and Subsidiaries
Consolidated
Statements of Cash Flows (Unaudited)
|
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
(in
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net
earnings/(loss)
|
$
|
115
|
|
|
$
|
657
|
|
|
$
|
612
|
|
|
$
|
(3,693)
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net earnings/(loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
180
|
|
|
225
|
|
|
783
|
|
|
913
|
|
Impairments and
(gain)/loss on disposal of assets, net
|
1
|
|
|
—
|
|
|
79
|
|
|
7
|
|
(Gain)/Loss on sale of
equity interest in naviHealth
|
2
|
|
|
(579)
|
|
|
2
|
|
|
(579)
|
|
Loss on early
extinguishment of debt
|
13
|
|
|
7
|
|
|
14
|
|
|
16
|
|
Share-based
compensation
|
5
|
|
|
22
|
|
|
89
|
|
|
90
|
|
Provision for/(benefit
from) deferred income taxes
|
496
|
|
|
(961)
|
|
|
496
|
|
|
(961)
|
|
Provision for bad
debts
|
16
|
|
|
20
|
|
|
65
|
|
|
106
|
|
Change in operating
assets and liabilities, net of effects from acquisitions and
divestitures:
|
|
|
|
|
|
|
|
(Increase)/decrease in trade receivables
|
(393)
|
|
|
735
|
|
|
(904)
|
|
|
82
|
|
Increase in
inventories
|
(261)
|
|
|
(401)
|
|
|
(1,584)
|
|
|
(409)
|
|
Increase/(decrease) in accounts payable
|
1,058
|
|
|
(610)
|
|
|
2,325
|
|
|
(162)
|
|
Other accrued
liabilities and operating items, net
|
(567)
|
|
|
1,125
|
|
|
452
|
|
|
6,550
|
|
Net cash provided by
operating activities
|
665
|
|
|
240
|
|
|
2,429
|
|
|
1,960
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Acquisition of
subsidiaries, net of cash acquired
|
—
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
Additions to property
and equipment
|
(126)
|
|
|
(136)
|
|
|
(400)
|
|
|
(375)
|
|
Purchases of
investments
|
(4)
|
|
|
(2)
|
|
|
(22)
|
|
|
(20)
|
|
Proceeds from sale of
investments
|
42
|
|
|
880
|
|
|
47
|
|
|
886
|
|
Proceeds from
divestitures, net of cash sold, and disposal of property and
equipment
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Net cash provided
by/(used in) investing activities
|
(88)
|
|
|
742
|
|
|
(378)
|
|
|
493
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Net change in
short-term borrowings
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
Proceeds from
interest rate swap terminations
|
—
|
|
|
112
|
|
|
18
|
|
|
112
|
|
Reduction of
long-term obligations
|
(517)
|
|
|
(511)
|
|
|
(570)
|
|
|
(1,399)
|
|
Net tax
proceeds/(withholdings) from share-based compensation
|
9
|
|
|
12
|
|
|
8
|
|
|
8
|
|
Dividends on common
shares
|
(141)
|
|
|
(141)
|
|
|
(573)
|
|
|
(569)
|
|
Purchase of treasury
shares
|
—
|
|
|
—
|
|
|
(200)
|
|
|
(350)
|
|
Net cash used in
financing activities
|
(649)
|
|
|
(528)
|
|
|
(1,317)
|
|
|
(2,200)
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rates changes on cash and equivalents
|
3
|
|
|
(12)
|
|
|
11
|
|
|
(13)
|
|
Cash and equivalents
reclassified to assets held for sale
|
(23)
|
|
|
—
|
|
|
(109)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and equivalents
|
(92)
|
|
|
442
|
|
|
636
|
|
|
240
|
|
Cash and equivalents
at beginning of period
|
3,499
|
|
|
2,329
|
|
|
2,771
|
|
|
2,531
|
|
Cash and
equivalents at end of period
|
$
|
3,407
|
|
|
$
|
2,771
|
|
|
$
|
3,407
|
|
|
$
|
2,771
|
|
Schedule
4
|
|
Cardinal Health,
Inc. and Subsidiaries
Segment
Information
|
|
Fourth
Quarter
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
2021
|
|
2020
|
|
(in
millions)
|
2021
|
|
2020
|
Pharmaceutical
|
|
|
|
|
Medical
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
Revenue
|
|
|
|
Amount
|
$
|
38,344
|
|
|
$
|
33,241
|
|
|
Amount
|
$
|
4,246
|
|
|
$
|
3,453
|
|
Growth
rate
|
15
|
%
|
|
—
|
%
|
|
Growth
rate
|
23
|
%
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
|
|
|
Segment
profit
|
|
|
|
Amount
|
$
|
358
|
|
|
$
|
359
|
|
|
Amount
1
|
$
|
(63)
|
|
|
$
|
120
|
|
Growth
rate
|
—
|
%
|
|
(20)
|
%
|
|
Growth
rate
|
(153)
|
%
|
|
24
|
%
|
Segment profit
margin
|
0.93
|
%
|
|
1.08
|
%
|
|
Segment profit
margin
|
(1.50)
|
%
|
|
3.49
|
%
|
|
|
Fiscal
Year
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
2021
|
|
2020
|
|
(in
millions)
|
2021
|
|
2020
|
Pharmaceutical
|
|
|
|
|
Medical
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
Revenue
|
|
|
|
Amount
|
$
|
145,796
|
|
|
$
|
137,495
|
|
|
Amount
|
$
|
16,687
|
|
|
$
|
15,444
|
|
Growth
rate
|
6
|
%
|
|
6
|
%
|
|
Growth
rate
|
8
|
%
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
|
|
|
Segment
profit
|
|
|
|
Amount
|
$
|
1,684
|
|
|
$
|
1,753
|
|
|
Amount
1,2
|
$
|
577
|
|
|
$
|
663
|
|
Growth
rate
|
(4)
|
%
|
|
(4)
|
%
|
|
Growth
rate
|
(13)
|
%
|
|
15
|
%
|
Segment profit
margin
|
1.15
|
%
|
|
1.28
|
%
|
|
Segment profit
margin
|
3.46
|
%
|
|
4.30
|
%
|
1 Medical segment profit/(loss) for the three months
ended June 30, 2021 and fiscal 2021
includes a reserve of $197 million to
reduce the carrying value of certain personal protective equipment
to its net realizable value.
2 Medical segment profit for fiscal 2020 does not
include $85 million incurred for
inventory write-offs and certain remediation and supply disruption
costs associated with fiscal 2020 voluntary surgical gown-related
recalls.
The sum of the components and certain computations may reflect
rounding adjustments.
Schedule
5
|
|
Cardinal Health,
Inc. and Subsidiaries
GAAP / Non-GAAP
Reconciliation1
|
|
|
|
Gross
|
|
|
|
Operating
|
Earnings
|
|
|
Net
|
|
|
Diluted
|
|
|
Margin
|
|
SG&A2
|
|
Earnings
|
Before
|
Provision
for
|
|
Earnings3
|
Effective
|
|
EPS3
|
|
Gross
|
Growth
|
|
Growth
|
Operating
|
Growth
|
Income
|
Income
|
Net
|
Growth
|
Tax
|
Diluted
|
Growth
|
(in millions, except
per
common share amounts)
|
Margin
|
Rate
|
SG&A2
|
Rate
|
Earnings
|
Rate
|
Taxes
|
Taxes
|
Earnings3
|
Rate
|
Rate
|
EPS3
|
Rate
|
Fourth Quarter
2021
|
GAAP
|
$
|
1,475
|
|
(7)
|
%
|
$
|
1,129
|
|
(1)
|
%
|
$
|
162
|
|
(40)
|
%
|
$
|
119
|
|
$
|
4
|
|
$
|
116
|
|
N.M.
|
|
2.6
|
%
|
$
|
0.40
|
|
N.M.
|
|
Surgical gown recall
costs/(income)
|
(24)
|
|
|
2
|
|
|
(26)
|
|
|
(26)
|
|
(7)
|
|
(19)
|
|
|
|
(0.06)
|
|
|
State opioid
assessment related to prior fiscal years
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
|
Restructuring and
employee severance
|
—
|
|
|
—
|
|
|
33
|
|
|
33
|
|
8
|
|
25
|
|
|
|
0.08
|
|
|
Amortization and
other acquisition-related costs
|
—
|
|
|
—
|
|
|
106
|
|
|
106
|
|
32
|
|
74
|
|
|
|
0.25
|
|
|
Impairments and
(gain)/loss on disposal of assets, net
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
3
|
|
(2)
|
|
|
|
(0.02)
|
|
|
Litigation
(recoveries)/charges, net4
|
—
|
|
|
—
|
|
|
44
|
|
|
44
|
|
22
|
|
22
|
|
|
|
0.07
|
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
3
|
|
11
|
|
|
|
0.04
|
|
|
(Gain)/Loss on sale
of equity interest in naviHealth
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
1
|
|
1
|
|
|
|
0.01
|
|
|
Non-GAAP
|
$
|
1,451
|
|
(8)
|
%
|
$
|
1,132
|
|
(1)
|
%
|
$
|
320
|
|
(28)
|
%
|
$
|
292
|
|
$
|
66
|
|
$
|
227
|
|
(26)
|
%
|
22.6
|
%
|
$
|
0.77
|
|
(26)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
2020
|
GAAP
|
$
|
1,590
|
|
(5)
|
%
|
$
|
1,137
|
|
(3)
|
%
|
$
|
270
|
|
(12)
|
%
|
$
|
815
|
|
$
|
158
|
|
$
|
656
|
|
N.M.
|
|
19.4
|
%
|
$
|
2.23
|
|
N.M.
|
|
Surgical gown recall
costs/(income)
|
(7)
|
|
|
3
|
|
|
(10)
|
|
|
(10)
|
|
(3)
|
|
(7)
|
|
|
|
(0.02)
|
|
|
State opioid
assessment related to prior fiscal years
|
—
|
|
|
1
|
|
|
(1)
|
|
|
(1)
|
|
—
|
|
(1)
|
|
|
|
—
|
|
|
Restructuring and
employee severance
|
—
|
|
|
—
|
|
|
42
|
|
|
42
|
|
10
|
|
32
|
|
|
|
0.11
|
|
|
Amortization and
other acquisition-related costs
|
—
|
|
|
—
|
|
|
129
|
|
|
129
|
|
32
|
|
97
|
|
|
|
0.33
|
|
|
Litigation
(recoveries)/charges, net
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
5
|
|
7
|
|
|
|
0.02
|
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
2
|
|
5
|
|
|
|
0.02
|
|
|
(Gain)/Loss on sale
of equity interest in naviHealth
|
—
|
|
|
—
|
|
|
—
|
|
|
(579)
|
|
(86)
|
|
(493)
|
|
|
|
(1.68)
|
|
|
Transitional tax
benefit, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(9)
|
|
9
|
|
|
|
0.03
|
|
|
Non-GAAP
|
$
|
1,583
|
|
(5)
|
%
|
$
|
1,141
|
|
(2)
|
%
|
$
|
442
|
|
(13)
|
%
|
$
|
415
|
|
$
|
110
|
|
$
|
305
|
|
(9)
|
%
|
26.4
|
%
|
$
|
1.04
|
|
(6)
|
%
|
1For more information on these measures, refer to the
Use of Non-GAAP Measures and Definitions schedules.
2Distribution, selling, general and administrative
expenses.
3Attributable to Cardinal Health, Inc.
4Litigation (recoveries)/charges, net includes
pre-tax charges of $1.17 billion and
$5.63 billion recorded in fiscal 2021
and 2020, respectively, related to the opioid litigation. During
three months ended June 30, 2021,
pre-tax charges of $149 million were
recorded related to the opioid litigation. The amount of tax
benefit increased by approximately $50
million during the three months ended June 30, 2021 compared to the tax impacts that
would have been recognized without the opioid litigation charge.
The net tax benefits associated with the opioid litigation charges
are $228 million and $488 million for fiscal 2021 and 2020,
respectively.
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
Earnings/
|
|
|
Net
|
|
|
|
|
|
Gross
|
|
|
|
Earnings/
|
(Loss)
|
Provision
for/
|
|
Earnings/
|
|
|
Diluted
|
|
|
Margin
|
|
SG&A2
|
Operating
|
(Loss)
|
Before
|
(Benefit
from)
|
Net
|
(Loss)3
|
Effective
|
|
EPS3
|
|
Gross
|
Growth
|
|
Growth
|
Earnings/
|
Growth
|
Income
|
Income
|
Earnings/
|
Growth
|
Tax
|
Diluted
|
Growth
|
(in millions, except
per
common share amounts)
|
Margin
|
Rate
|
SG&A2
|
Rate
|
(Loss)
|
Rate
|
Taxes
|
Taxes
|
(Loss)3
|
Rate
|
Rate
|
EPS3,4
|
Rate
|
Fiscal Year
2021
|
GAAP
|
$
|
6,778
|
|
(1)
|
%
|
$
|
4,533
|
|
(1)
|
%
|
$
|
472
|
|
N.M.
|
|
$
|
323
|
|
$
|
(289)
|
|
$
|
611
|
|
N.M.
|
|
(89.7)
|
%
|
$
|
2.08
|
|
N.M.
|
|
Surgical gown recall
costs/(income)
|
(24)
|
|
|
4
|
|
|
(28)
|
|
|
(28)
|
|
(7)
|
|
(21)
|
|
|
|
(0.07)
|
|
|
State opioid
assessment related to prior fiscal years
|
—
|
|
|
(38)
|
|
|
38
|
|
|
38
|
|
9
|
|
29
|
|
|
|
0.10
|
|
|
Restructuring and
employee severance
|
—
|
|
|
—
|
|
|
114
|
|
|
114
|
|
27
|
|
87
|
|
|
|
0.29
|
|
|
Amortization and
other acquisition-related costs
|
—
|
|
|
—
|
|
|
451
|
|
|
451
|
|
118
|
|
333
|
|
|
|
1.13
|
|
|
Impairments and
(gain)/loss on disposal of assets, net
|
—
|
|
|
—
|
|
|
79
|
|
|
79
|
|
15
|
|
64
|
|
|
|
0.21
|
|
|
Litigation
(recoveries)/charges, net5
|
—
|
|
|
—
|
|
|
1,129
|
|
|
1,129
|
|
606
|
|
523
|
|
|
|
1.78
|
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
3
|
|
11
|
|
|
|
0.04
|
|
|
(Gain)/Loss on sale
of equity interest in naviHealth investment
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
1
|
|
1
|
|
|
|
0.01
|
|
|
Non-GAAP
|
$
|
6,754
|
|
(2)
|
%
|
$
|
4,499
|
|
(1)
|
%
|
$
|
2,255
|
|
(5)
|
%
|
$
|
2,122
|
|
$
|
483
|
|
$
|
1,637
|
|
2
|
%
|
22.8
|
%
|
$
|
5.57
|
|
2
|
%
|
|
|
|
Fiscal Year
2020
|
GAAP
|
$
|
6,868
|
|
—
|
%
|
$
|
4,572
|
|
2
|
%
|
$
|
(4,098)
|
|
N.M.
|
|
$
|
(3,772)
|
|
$
|
(79)
|
|
$
|
(3,696)
|
|
N.M.
|
|
2.1
|
%
|
$
|
(12.61)
|
|
N.M.
|
|
Surgical gown recall
costs/(income)
|
48
|
|
|
(37)
|
|
|
85
|
|
|
85
|
|
22
|
|
63
|
|
|
|
0.22
|
|
|
State opioid
assessment related to prior fiscal years
|
—
|
|
|
(3)
|
|
|
3
|
|
|
3
|
|
1
|
|
2
|
|
|
|
0.01
|
|
|
Restructuring and
employee severance
|
—
|
|
|
—
|
|
|
122
|
|
|
122
|
|
29
|
|
93
|
|
|
|
0.31
|
|
|
Amortization and
other acquisition-related costs
|
—
|
|
|
—
|
|
|
524
|
|
|
524
|
|
130
|
|
394
|
|
|
|
1.34
|
|
|
Impairments and
(gain)/loss on disposal of assets, net
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
2
|
|
5
|
|
|
|
0.02
|
|
|
Litigation
(recoveries)/charges, net5
|
—
|
|
|
—
|
|
|
5,741
|
|
|
5,741
|
|
514
|
|
5,227
|
|
|
|
17.84
|
|
|
Loss on early
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
4
|
|
12
|
|
|
|
0.04
|
|
|
(Gain)/Loss on sale
of equity interest in naviHealth investment
|
|
|
|
|
—
|
|
|
(579)
|
|
(86)
|
|
(493)
|
|
|
|
(1.68)
|
|
|
Transitional tax
benefit, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
2
|
|
(2)
|
|
|
|
(0.01)
|
|
|
Non-GAAP
|
$
|
6,916
|
|
1
|
%
|
$
|
4,532
|
|
1
|
%
|
$
|
2,384
|
|
1
|
%
|
$
|
2,147
|
|
$
|
539
|
|
$
|
1,605
|
|
1 %
|
25.1
|
%
|
$
|
5.45
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1For more information on these measures, refer to the
Use of Non-GAAP Measures and Definitions schedules.
2Distribution, selling, general and administrative
expenses.
3Attributable to Cardinal Health, Inc.
4For fiscal 2020, 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 293 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. Fiscal 2020 non-GAAP diluted EPS is
calculated using a weighted average of 295 million common shares,
which includes potentially dilutive shares.
5Litigation (recoveries)/charges, net includes
pre-tax charges of $1.17 billion and
$5.63 billion recorded in fiscal 2021
and 2020, respectively, related to the opioid litigation. The net
tax benefits associated with the opioid litigation charges are
$228 million and $488 million for fiscal 2021 and 2020,
respectively.
Litigation(recoveries)/charges, includes a tax benefit recorded
during fiscal 2021 related to a net operating loss carryback.
Our wholly-owned insurance subsidiary recorded a self-insurance
pre-tax loss in its fiscal 2020 statutory financial statements
primarily related to opioid litigation. This self-insurance pre-tax
loss, which did not impact our pre-tax consolidated results, was
deducted on our fiscal 2020 consolidated federal income tax return
and contributed to a significant net operating loss for tax
purposes. The net operating loss was carried back and adjusted our
taxable income for fiscal 2015, 2016, 2017 and 2018 as permitted
under the Coronavirus Aid, Relief and Economic Security ("CARES")
Act. The total benefit from the net operating loss carryback was
$424 million; however, for purposes
of Non-GAAP financial measures, we allocated $389 million of the benefit to litigation
(recoveries)/charges, net, which is excluded from non-GAAP
measures, based on the relative amount of the self-insurance
pre-tax loss related to opioid litigation claims versus separate
tax adjustments. The tax benefit allocated to the separate tax
adjustments of $35 million is
included in non-GAAP measures.
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.
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 when the
underlying assessments were invalidated by a Court or reimbursed by
manufacturers.
- Restructuring and employee severance costs are excluded because
they are not part of the ongoing operations of our underlying
business.
- 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 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 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.
- Transitional tax benefit, net related to the Tax Cuts and Jobs
Act is excluded because it results from the one-time impact of a
very significant change in the U.S. federal corporate tax rate and,
due to the significant size of the benefit, obscures analysis of
trends and financial performance. The transitional tax benefit
includes the initial estimate and subsequent adjustments for the
re-measurement of deferred tax assets and liabilities due to the
reduction of the U.S. federal corporate income tax rate and the
repatriation tax on undistributed foreign earnings.
The tax effect for each of the items listed above, other than
the transitional tax benefit item, 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.
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 2021 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. The
excluded items for fiscal 2021 year to date period impacted the
Company's EPS by $3.49, which
includes a $3.21 charge related to
the opioid litigation.
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) and state opioid assessment related to prior fiscal
years.
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) restructuring and employee severance, (5) amortization
and other acquisition-related costs, (6) impairments and
(gain)/loss on disposal of assets, and (7) 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) restructuring and employee
severance, (5) amortization and other acquisition-related costs,
(6) impairments and (gain)/loss on disposal of assets, (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 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) restructuring and employee severance, (5) amortization
and other acquisition-related costs, (6) impairments and
(gain)/loss on disposal of assets, (7) litigation
(recoveries)/charges, net, (8) loss on early extinguishment of debt
and (9) (gain)/loss on sale of equity interest in naviHealth, each
net of tax, and (10) transitional tax benefit, net.
Non-GAAP effective tax rate: provision for/(benefit from)
income taxes adjusted for (1) LIFO charges/(credits), (2) surgical
gown recall costs/(income), (3) state opioid assessment related to
prior fiscal years, (4) restructuring and employee severance, (5)
amortization and other acquisition-related costs, (6) impairments
and (gain)/loss on disposal of assets, (7) litigation
(recoveries)/charges, net, (8) loss on early extinguishment of debt
and (9) (gain)/loss on sale of equity interest in naviHealth, each
net of tax, and (10) transitional tax benefit, net divided by
(earnings before income taxes adjusted for the first nine
items).
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.
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SOURCE Cardinal Health