- Narrowing fiscal year 2023 non-GAAP diluted EPS guidance to
$5.65 to $5.80, from $5.60
to $5.80 (13% growth at the
mid-point)1
- Providing preliminary fiscal year 2024 non-GAAP diluted EPS
guidance of $6.45 to $6.70 (15% growth at the mid-points)
- Providing long-term financial targets reflecting 12% to 14%
growth of non-GAAP diluted EPS (3-year CAGR)2
-
- Raising long-term financial target for Pharmaceutical segment
profit to 4% to 6% growth, from "low-single digit to mid-single
digit" growth
- Updating Medical Improvement Plan timeline for $650M+ in
segment profit to FY263
- Board of Directors approved new $3.5B share repurchase authorization expiring
December 31, 2027; company plans to
execute at least $2.0B of share
repurchases over the next three years
- Company provides strategic updates
DUBLIN,
Ohio, June 8, 2023 /PRNewswire/ -- Cardinal
Health (NYSE: CAH) today will host an Investor Day beginning at
9:00 a.m. ET, where among other
updates, management will detail its growth strategies to maximize
the company's potential for all stakeholders and move healthcare
forward.
"We are excited to further share the actions we are collectively
taking to build upon our progress and capture the significant
opportunities clearly in front of us," said Jason Hollar, Chief Executive Officer of
Cardinal Health. "We're becoming a simplified and more focused
Cardinal Health. We believe in our resilient underlying core
business and our plans to drive growth."
The company will also discuss its long-term financial outlook
and updated capital allocation framework.
Aaron Alt, Chief Financial
Officer of Cardinal Health commented, "We have strong momentum as
an enterprise, evidenced by the double-digit non-GAAP diluted EPS
growth reflected in our narrowed fiscal 2023 guidance, our
preliminary guidance for fiscal 2024 and in our long-term targets.
With our strong balance sheet, robust cash flow generation,
disciplined capital allocation framework and the plans we are
communicating today, we are well positioned to maximize shareholder
value creation."
Strategic updates
While Cardinal Health's business and portfolio review remains
active and ongoing, the company has completed a preliminary
assessment of the enterprise strategy and a more detailed review of
the Pharmaceutical segment.
At an enterprise level, Cardinal Health is continuing its path
towards becoming a simplified and more focused company. The company
is prioritizing expansion in Specialty as the key long-term growth
driver and investment opportunity for the enterprise. The company
remains focused on realizing the growth opportunities ahead in both
segments through its updated Pharmaceutical segment strategy and
the Medical Improvement Plan.
The company continues to focus on executing the Medical
Improvement Plan on the updated timeline, which remains a critical
priority for the enterprise. The company is continuing to drive
ongoing initiatives and invest in the business to support
customers' needs and achieve its long-term target.
With respect to the completed work for the Pharmaceutical
segment, the company is sharing the following:
Launching Navista™ Network
Cardinal Health is
launching Navista™ Network supporting community oncologists and
enabling them to remain independent as part of the company's focus
on expanding in Specialty.
Accelerating Outcomes™
As separately disclosed, the
company announced the merger of its Outcomes™ business into
Transaction Data Systems (TDS) which will expand solutions to
retail pharmacies.
Investing in Nuclear & Precision Health
Solutions
Additionally, after evaluating strategic
alternatives for Nuclear & Precision Health Solutions, the
company has determined retaining and investing in the business will
drive the most long-term value for shareholders. The company
announced a phase two investment for its Center for Theranostics
Advancement in support of continued product development over the
next several years.
Fiscal year 2023 guidance update
The company is
narrowing its fiscal year 2023 guidance ranges for non-GAAP diluted
EPS and Pharmaceutical segment profit:
- Non-GAAP diluted EPS: $5.65 to
$5.80, from $5.60 to $5.80 (13%
growth at the mid-point)
- Pharmaceutical segment profit: 11% to 12% growth, from 10.5% to
12% growth
The company is reiterating its other fiscal year 2023 guidance
assumptions provided on May 4th,
2023.
Preliminary fiscal year 2024 guidance
The company is
providing preliminary guidance for fiscal year 2024:
Non-GAAP diluted
EPS
|
$6.45 to
$6.70
|
Adjusted free cash
flow
|
~$2.0B
|
Capital
expenditures
|
~$500M
|
Interest and
other
|
$110M to
$130M
|
Non-GAAP effective tax
rate
|
23% to 25%
|
Pharmaceutical:
|
|
Revenue
|
~10% growth
|
Segment
profit
|
4% to 6%
growth
|
Medical:
|
|
Revenue
|
~3% growth
|
Segment
profit
|
~$400M
|
Long-term targets
The company is providing updated
long-term targets for fiscal years 2024 to 2026 (3-year CAGRs as of
fiscal year 2023 guidance baseline):
Non-GAAP diluted
EPS
|
12% to 14%
growth
|
Pharmaceutical:
|
|
Revenue
|
~10% growth
|
Segment
profit
|
4% to 6%
growth4
|
Medical:
|
|
Revenue
|
3% to 4%
growth
|
Segment
profit
|
$650M+ in
FY263
|
Share
Repurchases
|
at least
$2B5
|
Capital deployment updates
The company will provide a
long-term capital allocation framework to drive shareholder value
creation. Additionally, the Board approved a new $3.5B share repurchase authorization expiring
December 31, 2027, reflecting
$4.75B in total capacity for share
repurchases.
Webcast
Cardinal Health will host a webcast today from
9:00 a.m. to 12:00 p.m. ET. 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 on the Investor Relations page for 12 months.
About Cardinal Health
Cardinal Health is a distributor
of pharmaceuticals, a global manufacturer and distributor of
medical and laboratory products, and a provider of performance and
data solutions for health care facilities. With more than 50 years
in business, operations in more than 30 countries and approximately
46,500 employees globally, Cardinal Health is essential to care.
Information about Cardinal Health is available at
cardinalhealth.com.
Contacts
Media: Erich
Timmerman, erich.timmerman@cardinalhealth.com and
614.757.8231
Investors: Kevin Moran,
kevin.moran@cardinalhealth.com and 614.757.7942
1GAAP refers to U.S. generally accepted accounting
principles. This news release includes GAAP financial measures as
well as non-GAAP financial measures, which are financial measures
not calculated in accordance with GAAP. The company does not
provide forward-looking guidance 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 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
recognized in fiscal year 2020.
2FY24 to FY26 CAGR; as of FY23 guidance baseline.
3Previously $650M+ by FY25. The company is currently
analyzing how this financial update to the Medical segment may
impact other components of its GAAP financial statements, including
goodwill. This analysis is subject to completion of the company's
standard quarter-end closing procedures; however, it is possible
that the goodwill of the Medical Unit (Medical operating segment
excluding Cardinal Health at-Home Solutions division) could be
impaired by up to $1.1 billion, which
was the carrying value of the Medical Unit goodwill at March 31, 2023.
4Previously "low-single digit to mid-single digit"
segment profit growth.
5Includes base share repurchases of $500M per year plus $500M of additional share repurchases in Q4 FY23
and/or Q1 FY24.
Cautions Concerning Forward-Looking Statements
This
release contains forward-looking statements addressing
expectations, prospects, estimates and other matters that are
dependent upon future events or developments. These statements may
be identified by words such as "expect," "anticipate," "intend,"
"plan," "believe," "will," "should," "could," "would," "project,"
"continue," "likely," and similar expressions, and include
statements reflecting future results or guidance, statements of
outlook and various accruals and estimates. These matters are
subject to risks and uncertainties that could cause actual results
to differ materially from those projected, anticipated or implied.
These risks and uncertainties include risks arising from ongoing
inflationary pressures and supply chain constraints, including the
risk that our plans to mitigate such effects may not be as
successful as we anticipate; the possibility that our Medical unit
goodwill could be further impaired due to additional changes to our
long-term financial plan, increases in global interest rates or
unfavorable changes in the U.S. statutory tax rate; risks
associated with our strategic updates, including the risk that
certain initiatives may not be successful, may create unintended
consequences, and the risk that we may not realize expected
benefits; 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 or other components
of our generics programs; ongoing risks associated with the
distribution of opioids, including the financial impact associated
with the settlements with governmental authorities and the risk
that challenges to our plans to take tax deductions for
opioid-related losses could adversely impact our financial results;
risks arising from the Department of Justice investigation which we
believe concerns our anti-diversion program and risks associated
with the injunctive relief requirements under the national
settlement, including the risk that we may incur higher costs or
operational challenges in the implementation and maintenance of the
required changes; risks associated with the manufacture and
sourcing of certain products, including risks related to our
ability and the ability of third-party manufacturers to import or
export certain products or component parts and to comply with
applicable regulations; our ability to manage uncertainties
associated with the pricing of branded pharmaceuticals; and risks
associated with our cost savings initiatives or other business
process initiatives, such as the Medical Improvement Plan,
including the possibility that they could fail to achieve the
intended results. Cardinal Health is subject to additional risks
and uncertainties described in Cardinal Health's Form 10-K, Form
10-Q and Form 8-K reports and exhibits to those reports. This
release reflects management's views as of June 8, 2023. Except to the extent required by
applicable law, Cardinal Health undertakes no obligation to update
or revise any forward-looking statement. Forward-looking statements
are aspirational and not guarantees or promises that goals, targets
or projections will be met, and no assurance can be given that any
commitment, expectation, initiative or plan in this report can or
will be achieved or completed. Cardinal Health provides definitions
and reconciliations of non-GAAP financial measures and their most
directly comparable GAAP financial measures at
ir.cardinalhealth.com.
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SOURCE Cardinal Health