Summary
Cardinal Health Inc.'s (CAH) 2014 10-K report highlights a year of significant revenue decline primarily due to the expiration of its large contract with Walgreens. Despite this, the company demonstrated resilience, with a substantial increase in operating earnings and earnings from continuing operations, largely driven by the absence of a significant goodwill impairment charge from the prior year. The company's strategic focus remains on its two core segments: Pharmaceutical and Medical, with ongoing efforts to enhance efficiency and reduce costs for healthcare providers. Key developments include the formation of a generic pharmaceutical sourcing joint venture with CVS Caremark, Red Oak Sourcing, aiming to leverage combined purchasing power. The Medical segment saw expansion through the acquisition of Access Closure Inc., adding to its portfolio of self-manufactured products. Cardinal Health continues to manage its capital effectively through share repurchases and dividend payments, while maintaining a strong liquidity position. Investors should note the company's significant reliance on its largest customer, CVS, which accounted for 28% of fiscal 2014 revenue.
Financial Highlights
49 data points| Revenue | $91.08B |
| Cost of Revenue | $85.92B |
| Gross Profit | $5.16B |
| SG&A Expenses | $3.03B |
| Operating Income | $1.89B |
| Interest Expense | $133.00M |
| Net Income | $1.17B |
| EPS (Basic) | $3.42 |
| EPS (Diluted) | $3.38 |
| Shares Outstanding (Basic) | 341.00M |
| Shares Outstanding (Diluted) | 345.00M |
Key Highlights
- 1Revenue declined 10% to $91.1 billion in fiscal 2014, largely attributed to the expiration of the Walgreens distribution contract.
- 2Operating earnings increased significantly to $1.885 billion from $996 million in fiscal 2013, primarily due to the absence of a large goodwill impairment charge in the prior year.
- 3Established Red Oak Sourcing, LLC, a 50/50 joint venture with CVS Caremark for generic pharmaceutical sourcing, effective July 2014.
- 4Acquired Access Closure, Inc. in May 2014 for $320 million, expanding the Medical segment's self-manufactured product offerings.
- 5Acquired AssuraMed, Inc. in March 2013 for $2.07 billion, strengthening the Medical segment's presence in homecare.
- 6CVS represented a significant customer, accounting for 28% of fiscal 2014 revenue.
- 7The company repurchased $673 million of its common shares during fiscal 2014 and maintained a $2.9 billion cash and equivalents balance.