10-KPeriod: FY2011

CARDINAL HEALTH INC Annual Report, Year Ended Jun 30, 2011

Filed August 26, 2011For Securities:CAH

Summary

Cardinal Health Inc.'s 2011 10-K filing reports robust revenue growth, reaching $102.6 billion, driven primarily by its Pharmaceutical segment. The company achieved significant growth through strategic acquisitions, including Kinray, Yong Yu, and P4 Healthcare, which expanded its reach in the U.S. retail independent pharmacy market, established a presence in China, and strengthened its specialty pharmaceutical services, respectively. These acquisitions contributed $2.9 billion in revenue and $61 million in operating earnings in fiscal year 2011. The company experienced a 26% increase in Pharmaceutical segment profit, attributed to strong performance in generic drug programs, new product launches, and favorable branded manufacturer agreements. Conversely, the Medical segment saw a 14% decrease in profit, impacted by rising commodity costs for manufactured products. Despite these segment-specific challenges, the overall consolidated operating earnings increased by 16% to $1.5 billion, reflecting effective cost management and strategic execution. The company also continued its commitment to shareholder returns, increasing its quarterly dividend by 11% and repurchasing shares.

Financial Highlights

50 data points
Beta

Revenue

$102.64B

4.1% Gross Margin

Net Income

$959.00M

0.9% Net Margin

EPS (Diluted)

$2.72

Total Assets

$22.85B

Cash & Equivalents

$1.93B

Free Cash Flow

$1.10B

Financial Statements
Beta
Revenue$102.64B
Cost of Revenue$98.48B
Gross Profit$4.16B
SG&A Expenses$2.53B
Operating Income$1.51B
Interest Expense$93.00M
Net Income$959.00M
EPS (Basic)$2.75
EPS (Diluted)$2.72
Shares Outstanding (Basic)349.00M
Shares Outstanding (Diluted)353.00M

Key Highlights

  • 1Record revenue of $102.6 billion achieved in fiscal year 2011, a 4% increase from the prior year.
  • 2Pharmaceutical segment profit rose 26% due to strong generic drug performance and strategic acquisitions.
  • 3Three key acquisitions in fiscal 2011 (Kinray, Yong Yu, P4 Healthcare) contributed $2.9 billion in revenue.
  • 4Medical segment profit declined 14% due to increased commodity costs impacting manufactured products.
  • 5Consolidated operating earnings grew 16% to $1.5 billion, demonstrating overall operational improvement.
  • 6Quarterly dividend increased by 11% to $0.78 per share on an annualized basis.
  • 7The company's largest customers, Walgreens and CVS, accounted for 45% of total revenue in fiscal 2011.

Frequently Asked Questions

Cardinal Health's revenue in fiscal year 2011 reached a record $102.6 billion, primarily driven by a 4% increase in its Pharmaceutical segment. This growth was fueled by strategic acquisitions, including Kinray, Yong Yu, and P4 Healthcare, which contributed to increased sales volume, as well as strong performance in generic pharmaceutical programs and branded pharmaceutical sales.

The acquisitions of Kinray, Yong Yu, and P4 Healthcare in fiscal year 2011 significantly contributed to Cardinal Health's financial performance. These acquisitions collectively added $2.9 billion to revenue and $61 million to operating earnings. Kinray expanded its service to retail independent pharmacies, Yong Yu established a foothold in the Chinese market, and P4 Healthcare bolstered its specialty pharmaceutical services.

The Pharmaceutical segment saw a 26% increase in profit, largely due to strong performance in generic drug programs, new product launches, and favorable distribution service agreements. The Medical segment's profit decreased by 14% primarily due to higher commodity costs for manufactured products and somewhat sluggish healthcare utilization impacting higher-margin products.

Cardinal Health demonstrated a balanced capital deployment strategy by investing in acquisitions and increasing its quarterly dividend by 11%. The company also repurchased shares during the fiscal year. As of June 30, 2011, the company had $1.9 billion in cash and equivalents, and it maintained adequate capital resources to fund working capital, capital expenditures, and debt service requirements.