01—Abstract
Summary
Summary of the 10-K filed August 13, 2015. Cited figures are marked; the original filing is the authoritative source.
Cardinal Health Inc. reported robust growth in fiscal year 2015, with total revenue increasing by 13% to $102.5 billiona.
This expansion was primarily driven by strong performance in its Pharmaceutical segment, fueled by sales growth from existing and new customers, alongside increased sales of branded pharmaceuticals and newly launched hepatitis C treatments. The Medical segment also contributed positively, with revenue growth attributed to acquisitions. The company highlighted significant strategic moves, including the acquisition of Harvard Drug Group for $1.1 billionb and the pending acquisition of Johnson & Johnson's Cordis business for $1.9 billion, aimed at strengthening its core offerings and expanding its market reach.
Financially, Cardinal Health demonstrated improved profitability, with GAAP operating earnings up 15% to $2.2 billionc and GAAP diluted EPS rising 7% to $3.61. The company also returned value to shareholders through share repurchases and increased dividends. Despite the positive trajectory, the company noted the ongoing impact of the Walgreens contract expiration, which negatively affected revenue growth, and highlighted the increasing impact of acquisition-related costs on future earnings.
02—Key points
Key Highlights
- Revenue increased by 13% to $102.5 billion in fiscal year 2015, driven by strong performance in the Pharmaceutical segment.
- GAAP operating earnings grew 15% to $2.2 billion, and GAAP diluted EPS increased by 7% to $3.61.
- Completed the acquisition of Harvard Drug Group for $1.1 billion and announced the pending acquisition of Cordis business for $1.9 billion to expand strategic areas.
- Pharmaceutical segment profit increased by 20% due to strong generics program performance and sales growth, partially offset by customer pricing changes.
- Medical segment profit saw a decrease of 3%, primarily due to a decline in national brand product distribution, though offset by strategic product expansion.
- The company returned $1.0 billion to shareholders through share repurchases and increased its quarterly dividend by 13%.
- Cash and equivalents increased significantly to $4.6 billion from $2.9 billion year-over-year, supported by operating cash flow and debt issuance.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Cardinal Health Inc kept $0.01.
- Revenue$102.53B100.0%
- Cost of revenue−$96.82B94.4%
- Gross profit$5.71B5.6%
- Operating costs−$3.55B3.5%
- Operating income$2.16B2.1%
- Interest, other & tax−$946.0M0.9%
- Net income$1.22B1.2%
Where FY2015 revenue went
$102.53B- Cost of revenue: $96.82B, 94% of revenue
- Net income: $1.22B, 1.2% of revenue
- SG&A: $3.24B, 3.2% of revenue
- Interest, other & tax: $946.0M, 0.9% of revenue
Kept 1.2% as net incomeNet income $1.22B · 1.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed August 13, 2015Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $102.53B$91.08B | +12.6% |
| Cost of Revenue | $96.82B$85.92B | +12.7% |
| Gross Profit | $5.71B$5.16B | +10.7% |
| SG&A Expenses | $3.24B$3.03B | +7.0% |
| Operating Income | $2.16B$1.89B | +14.6% |
| Interest Expense | $141.00M$133.00M | +6.0% |
| Net Income | $1.22B$1.17B | +4.2% |
| EPS (Basic) | $3.66$3.42 | +7.0% |
| EPS (Diluted) | $3.62$3.38 | +7.1% |
| Shares Outstanding (Basic) | 332.00M341.00M | −2.6% |
| Shares Outstanding (Diluted) | 335.00M345.00M | −2.9% |
05—Questions
Frequently Asked Questions
What were the main drivers of Cardinal Health's revenue growth in fiscal year 2015?
Cardinal Health's revenue increased by 13% to $102.5 billion in fiscal year 2015. The primary driver was the Pharmaceutical segment, which benefited from sales growth from existing and new pharmaceutical distribution customers, increased sales of branded pharmaceuticals, and the launch of new hepatitis C pharmaceutical products. The Medical segment also contributed to revenue growth, largely due to acquisitions.
What significant acquisitions did Cardinal Health complete or plan during fiscal year 2015?
Cardinal Health completed the acquisition of Harvard Drug Group for $1.1 billion in July 2015. Additionally, the company entered into an agreement to acquire the Cordis business from Johnson & Johnson for $1.9 billion, which was expected to close in the second quarter of fiscal year 2016. These acquisitions are intended to enhance the company's strategic focus areas.
How did Cardinal Health's profitability change in fiscal year 2015?
Cardinal Health reported improved profitability in fiscal year 2015. GAAP operating earnings increased by 15% to $2.2 billion, and GAAP diluted earnings per share (EPS) rose by 7% to $3.61, compared to the prior year. Non-GAAP operating earnings increased by 16% and non-GAAP diluted EPS by 14%, reflecting strong operational performance offset by acquisition-related costs.
How did the company manage its capital and return value to shareholders in fiscal year 2015?
Cardinal Health significantly increased its cash and equivalents balance to $4.6 billion from $2.9 billion, supported by $2.5 billion in net cash provided by operating activities and $1.5 billion in new debt issuance. The company deployed capital by repurchasing $1.0 billion of its common shares and increasing its quarterly dividend by 13%.
06—Continue