Cardinal Health, Inc. · NYSE:CAH
Cardinal Health — Q3 FY2015 Earnings Presentation
22 slides from Cardinal Health's earnings presentation, Apr 30, 2015
Slide 1: Q3 FY2015 earnings investor/analyst call
Q3 FY2015 earnings investor/analyst call April 30, 2015 © Copyright 2015, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health.
Slide 2: Forward-looking statements and GAAP reconciliation
Forward-looking statements and GAAP reconciliation Cautions Concerning Forward-Looking Statements This presentation contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These statements may be ident
Slide 3: Financial summary
Q3 FY2015 Financial summary GAAP Basis ($M) Non-GAAP Basis ($M) Q3 FY15 Q3 FY14 Q3 FY15 Q3 FY14 Revenue $25,375 $21,427 % change 18% (13)% Operating earnings $591 $508 $657 $561 % change 16% 7% 17% (3)% Ratio to revenue 2.33% 2.37% 2.59% 2.62% Earnings from continuing ops $365 $315 $396 $349 % chang
Slide 4: Pharmaceutical segment business analysis
Q3 FY2015 Pharmaceutical segment business analysis Q3 FY15 Q3 FY14 % Change ($M) ($M) Revenue $22,605 $18,762 20% Segment profit $567 $452 25% Segment profit margin 2.51% 2.41% Highlights: • Revenue increased due to growth from existing and new customers. • Segment profit increased, driven by strong
Slide 5: Medical segment business analysis
Q3 FY2015 Medical segment business analysis Q3 FY15 Q3 FY14 % Change ($M) ($M) Revenue $2,774 $2,657 4% Segment profit $102 $111 (8)% Segment profit margin 3.66% 4.16% Highlights: • Revenue increased primarily due to contributions from acquisitions. • Segment profit and profit margin rate decreased
Slide 6: GAAP to non-GAAP reconciliation
Q3 FY2015 GAAP to non-GAAP reconciliation Q3 FY 2015 Q3 FY 2014 Earnings from Diluted EPS Earnings from Diluted EPS Operating Operating Continuing from Continuing Continuing from Continuing Earnings ($M) Earnings ($M) Operations ($M) Operations Operations ($M) Operations GAAP $591 $365 $1.09 $508 $3
Slide 7: FY2015 outlook
FY2015 outlook © Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and 7 ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health.
Slide 8: CAH FY2015 financial expectations
April 30, 2015 CAH FY2015 financial expectations FY2015 non-GAAP diluted EPS from continuing operations: $4.28 - $4.38 © Copyright 2015, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and 8 ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health.
Slide 9: FY15 corporate assumptions
April 30, 2015 FY15 corporate assumptions FY15 outlook FY14 actual Non-GAAP effective tax rate 36.0% – 37.0%1 35.3% Diluted weighted average 336M – 337M 345.2M shares outstanding Interest and other, net $135M – $145M $86.8M Capital expenditures ~$330M $249M Acquisition-related intangible ~$190M or ~
Slide 10: © Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO
© Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health.
Slide 11: Q3 FY2015 trailing five quarters and GAAP to Non-GAAP reconciliation statements
Q3 FY2015 trailing five quarters and GAAP to Non-GAAP reconciliation statements © Copyright 2015 Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CARE are trademarks or registered trademarks of Cardinal Health. 11
Slide 12: Segment analysis
Q3 FY2015 Segment analysis Pharmaceutical segment Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15 Q3 FY15 Revenue 18,762 20,092 21,209 22,627 22,605 ($M) Segment Profit 452 377 451 542 567 ($M) Medical segment Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15 Q3 FY15 Revenue 2,657 2,794 2,852 2,914 2,774 ($M) Segment Profit 111 96 1
Slide 13: GAAP / Non-GAAP Reconciliation Third Quarter 2015
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Third Quarter 2015 Operating Earnings Before Provision Earnings Earnings from Diluted EPS Diluted EPS Earnings Income Taxes for from Continuing from from Continuing Operating Growth and Discontinued Income Continuing Operations Co
Slide 14: GAAP / Non-GAAP Reconciliation Fiscal Year 2014
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Fiscal Year 2014 Operating Earnings Before Provision Earnings Earnings from Diluted EPS Diluted EPS Earnings Income Taxes for from Continuing from from Continuing Operating Growth and Discontinued Income Continuing Operations Cont
Slide 15: Total Company Business Analysis
Cardinal Health, Inc. and Subsidiaries Total Company Business Analysis Non-GAAP Third Quarter Third Quarter (in millions) 2015 2014 2015 2014 Revenue Amount $ 25,375 $ 21,427 Growth rate 18 % (13)% Operating earnings Amount $ 591 $ 508 $ 657 $ 561 Growth rate 16 % 7% 17 % (3)% Earnings from continui
Slide 16: Segment Business Analysis Third Quarter
Cardinal Health, Inc. and Subsidiaries Segment Business Analysis Third Quarter Third Quarter (in millions) 2015 2014 (in millions) 2015 2014 Pharmaceutical Medical Revenue Revenue Amount $ 22,605 $ 18,762 Amount $ 2,774 $ 2,657 Growth rate 20 % (15)% Growth rate 4% 7% Segment profit Segment profit A
Slide 17: Segment Business Analysis Year-to-Date
Cardinal Health, Inc. and Subsidiaries Segment Business Analysis Year-to-Date Year-to-Date (in millions) 2015 2014 (in millions) 2015 2014 Pharmaceutical Medical Revenue Revenue Amount $ 66,440 $ 60,018 Amount $ 8,540 $ 8,168 Growth rate1 11 % (12)% Growth rate 5% 11 % Segment profit Segment profit
Slide 18: GAAP / Non-GAAP Reconciliation Third Quarter
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Third Quarter (in millions) 2015 2014 GAAP return on equity 23.4 % 19.2 % Non-GAAP return on equity Net earnings $ 365 $ 315 Restructuring and employee severance, net of tax, in continuing operations 4 3 Amortization and other acq
Slide 19: GAAP / Non-GAAP Reconciliation Year-to-Date
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Year-to-Date (in millions) 2015 2014 GAAP return on equity 19.5 % 19.6 % Non-GAAP return on equity Net earnings $ 920 $ 932 Restructuring and employee severance, net of tax, in continuing operations 21 16 Amortization and other ac
Slide 20: GAAP / Non-GAAP Reconciliation
Schedule 8 Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Third Quarter Year-to-Date (in millions) 2015 2014 2015 2014 GAAP effective tax rate from continuing operations 34.6 % 38.0 % 36.3 % 35.5 % Non-GAAP effective tax rate from continuing operations Earnings before income t
Slide 21: GAAP / Non-GAAP Reconciliation Fiscal Year
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation Fiscal Year (in millions) 2014 GAAP effective tax rate from continuing operations 35.3 % Non-GAAP effective tax rate from continuing operations Earnings before income taxes and discontinued operations $ 1,798 Restructuring and emp
Slide 22: Use of Non-GAAP Measures
Cardinal Health, Inc. and Subsidiaries Use of Non-GAAP Measures In fiscal 2015, the Company began excluding last-in, first-out ("LIFO") inventory charges/(credits)5 from its non-GAAP earnings, for consistency with the presentation by some of its peers. The Company did not record any LIFO charges or