Cardinal Health, Inc. · NYSE:CAH
Cardinal Health — Q1 FY2007 Earnings Presentation
21 slides from Cardinal Health's earnings presentation, Oct 27, 2006
Slide 1: First Quarter Earnings
October 27, 2006 First Quarter Earnings Exhibit 99.03
Slide 2: Forward-Looking Statements and GAAP Reconciliation
Forward-Looking Statements and GAAP Reconciliation Except for historical information, all other information in this presentation consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements are subject
Slide 3: Today's Agenda
Today’s Agenda Opening remarks Kerry Clark President & Chief Executive Officer Financial overview Jeff Henderson Chief Financial Officer PTS update David Schlotterbeck CEO, Pharmaceutical and Medical Products Q&A
Slide 4: Financial Overview
Financial Overview • FY 2007 Q1 Results – Consolidated • FY 2007 Q1 Results – Segments • Key Value Drivers • FY 2007 Financial Targets and Goals • Other Items
Slide 5: Q1 FY 2007 Recap
Q1 FY 2007 Recap Revenue Operating earnings Earnings from continuing operations Diluted EPS Operating cash flow Return on equity $ M % Change $21,357 11% $ 464 23% $ 300 26% $ 0.73 33% $ 722 14.5% $ M % Change $ 492 23% $ 320 27% $ 0.78 32% 15.3% GAAP Basis Note: % change over prior year quarter Non
Slide 6: Q1 Operating Earnings and EPS
Q1 Operating Earnings and EPS Operating Earnings ($MM) Diluted EPS from Continuing Operations Operating Earnings ($MM) Diluted EPS from Continuing Operations GAAP Consolidated $464 $0.73 $377 $0.55 Special Items $24 $0.04 $21 $0.03 Impairment Charges & Other $4 $0.01 $3 $0.01 Non-GAAP Consolidated $
Slide 7: Cardinal Health Business Analysis: Healthcare Supply Chain Services - Pharmaceutical
Cardinal Health Business Analysis Healthcare Supply Chain Services - Pharmaceutical Q1 FY ‘07 Q1 FY ‘06 $ M $ M % change Revenue $ 18,505 $ 16,509 12% Operating earnings $ 301 $ 243 24% Non-recurring and other items $ Highlights: • Economic Profit margin increased 15 basis points to 0.76% vs. prior
Slide 8: Cardinal Health Business Analysis: Healthcare Supply Chain Services - Medical
Cardinal Health Business Analysis Healthcare Supply Chain Services - Medical Q1 FY ‘07 Q1 FY ‘06 $ M $ M % change Revenue $ 1,806 $ 1,763 2% Operating earnings $ 74 $ 82 (10%) Highlights: • Economic Profit margin declined 64 basis points to 1.17% due to earnings decline and increased capital deploye
Slide 9: Cardinal Health Business Analysis: Clinical Technologies and Services
Cardinal Health Business Analysis Clinical Technologies and Services Q1 FY ‘07 Q1 FY ‘06 $ M $ M % change Revenue $ 594 $ 3% Operating earnings $ 68 $ 78 (14%) Highlights: • New product launch delays in medication technologies (Pyxis and Alaris) impacted revenue and earnings during the quarter • Ear
Slide 10: Cardinal Health Business Analysis: Pharmaceutical Technologies and Services
Cardinal Health Business Analysis Pharmaceutical Technologies and Services Q1 FY ‘07 Q1 FY ‘06 $ M $ M % change Revenue $ 451 $ 411 10% Operating earnings $ 22 $ 20 13% Highlights: • Good earnings growth from oral technologies and packaging services • Strong demand for proprietary technologies, led
Slide 11: Cardinal Health Business Analysis: Medical Products Manufacturing
Cardinal Health Business Analysis Medical Products Manufacturing Q1 FY ‘07 Q1 FY ‘06 $ M $ M % change Revenue $ 424 $ 383 11% Operating earnings $ 61 $ 53 15% Highlights: • Revenue growth driven by strong demand for respiratory products, convertors and gloves • Integration of Denver Biomedical ahead
Slide 12: FY 2007 – Key Value Drivers
FY 2007 – Key Value Drivers Operating Growth – Strong demand for products and services drive revenue growth – Within Healthcare Supply Chain Services, leverage of scale, capital efficiency and operational excellence should drive Economic Profit margin expansion – Within Pharmaceutical and Medical Pr
Slide 13: FY 2007 Financial Targets & Goals
FY 2007 Financial Targets & Goals Over FY'07 - FY'09 3 Year Period: Fiscal Year 2007 Revenue: + 8 - 10% At or above the high end of long-term goal EPS ¹ : + 12 - 15% $3.50 - $3.70 per share (includes equity compensation expense) Operating FY07 OE ² growth Segment Revenue Earnings ² vs. long-term tar
Slide 14: Other Items
Other Items Generics – Global focus / leveraging scale across all of Cardinal – Strategic initiatives • Worldwide sourcing capabilities • Strategic product ownership – Growth • Proprietary Source program • Customer contract compliance • New customers One Cardinal Health update
Slide 15: Cardinal Health
‘CardinalHealth
Slide 16: GAAP / Non-GAAP Reconciliation
ba actcapenemiehempable: Wes farryardhsereninmnten tg acal ‘GAAP / NON-GAAP RECONCILIATION {in miions) HEALTHCARE SUPPLY CHAIN SERVICES First Quarter Fiscal 2007 First Quarter Fiscal 2006: Pharmaceutical aly August September Total Jay ——August_—_ September Total Economic Profit Margin Operating eari
Slide 17: GAAP / Non-GAAP Reconciliation
CARDINAL HEALTH, INC. AND SUBSIDIARIES {in millions) Operating Earnings Amount Growth Rate ision for | Ta Earnings from Continuing Operations Amount Growth Rate Diluted EPS from Continuing Operations Amount Growth Rate Operating Earnings ‘Amount Growth Rate Provision for income Taxes Earnings from C
Slide 18: GAAP / Non-GAAP Reconciliation
CARDINAL HEALTH, INC. AND SUBSIDIARIES GAAP | NON-GAAP RECONCILIATION t Quarter Fiscal (in millions) 2007, 2006, Return on Equity 14.5% 10.9% Non-GAAP Return on Equi Earnings from continuing operations $ 300.3 s 2375 Special tems, net of tax 477 13.5 Eamings from continuing operations, excluding spe
Slide 19: GAAP / Non-GAAP Reconciliation
CARDINAL HEALTH, INC. AND SUBSIDIARIES GAAP / NON-GAAP RECONCILIATION First Quarter Fiscal ns) 2007 2006 Effective Tax Rate from Continuing Operations 278% 31.3% Non-GAAP Effective Tax Rate from Continuing Operations Earnings before income taxes and discontinued operations $416.0 $ 3457 Special item
Slide 20: Definitions
CARDINAL HEALTH, INC. AND SUBSIDIARIES DEFINITIONS long-term obligations plus short-term borrowings Debt to Total Capital: debt divided by (debt plus total shareholders’ equity’ Diluted EPS from Continuing Operations: earings from continuing operations divided by diluted weighted average shares outs
Slide 21: Working together. For life.
sn atheat Working together. For life.”