01—Abstract
Summary
Summary of the 10-K filed August 16, 2021. Cited figures are marked; the original filing is the authoritative source.
Cardinal Health, Inc. reported total revenue of $162.5 billiona for fiscal year 2021, marking a 6% increase over the prior year.
This growth was primarily driven by the Pharmaceutical segment, which saw increased sales from pharmaceutical distribution and specialty solutions. The company's GAAP operating earnings significantly improved from a loss of $4.1 billionb in fiscal 2020 to earnings of $472 million in fiscal 2021. However, this turnaround was heavily influenced by a substantial reduction in litigation charges related to opioid settlements.
Non-GAAP operating earnings saw a modest decrease of 5% to $2.3 billionc, impacted by COVID-19 related inventory reserves in the Medical segment and volume declines in the Pharmaceutical segment's generics program. Looking ahead, Cardinal Health has made strides in resolving its opioid-related legal liabilities by entering into a proposed settlement agreement that, if finalized, would see payments of up to $6.37 billion spread over 18 years.
The company also completed the divestiture of its Cordis business in August 2021, which is expected to reduce annual revenue by approximately $800 milliond. Despite operational challenges like COVID-19 impacts and increased supply chain costs, the company's liquidity remains strong, with cash and equivalents increasing to $3.4 billion.
02—Key points
Key Highlights
- Total revenue grew 6% to $162.5 billion in fiscal 2021.
- Significant improvement in GAAP operating earnings, moving from a $4.1 billion loss in FY2020 to $472 million in FY2021, largely due to reduced opioid litigation charges.
- Proposed a significant settlement for opioid litigation, with a cash component of up to $6.37 billion payable over 18 years.
- Completed the divestiture of the Cordis business for $927 million in August 2021.
- Medical segment faced adverse impacts from COVID-19, including a $197 million inventory reserve for gloves.
- Pharmaceutical segment profit declined 4%, primarily due to volume decreases in the generics program.
- Cash and equivalents increased to $3.4 billion at the end of fiscal 2021.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Cardinal Health Inc kept $0.00.
- Revenue$162.47B100.0%
- Cost of revenue−$155.69B95.8%
- Gross profit$6.78B4.2%
- Operating costs−$6.31B3.9%
- Operating income$472.0M0.3%
- Interest, other & tax$139.0M0.1%
- Net income$611.0M0.4%
Where FY2021 revenue went
$162.47B- Cost of revenue: $155.69B, 96% of revenue
- Operating income: $472.0M, 0.3% of revenue
- SG&A: $4.53B, 2.8% of revenue
- Other operating costs: $1.77B, 1.1% of revenue
Kept 0.3% as operating incomeOperating income $472.0M · 0.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed August 16, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $162.47B$152.92B | +6.2% |
| Cost of Revenue | $155.69B$146.05B | +6.6% |
| Gross Profit | $6.78B$6.87B | −1.3% |
| SG&A Expenses | $4.53B$4.57B | −0.9% |
| Operating Income | $472.00M-$4.10B | +111.5% |
| Interest Expense | $180.00M$238.00M | −24.4% |
| Net Income | $611.00M-$3.70B | +116.5% |
| EPS (Basic) | $2.09$-12.61 | +116.6% |
| EPS (Diluted) | $2.08$-12.61 | +116.5% |
| Shares Outstanding (Basic) | 292.00M293.00M | −0.3% |
| Shares Outstanding (Diluted) | 294.00M293.00M | +0.3% |
05—Questions
Frequently Asked Questions
What was Cardinal Health's financial performance in fiscal year 2021?
Cardinal Health reported total revenue of $162.5 billion for fiscal year 2021, a 6% increase year-over-year. GAAP operating earnings improved significantly to $472 million from a loss of $4.1 billion in the prior year, primarily driven by a reduction in opioid litigation charges. Non-GAAP operating earnings decreased by 5% to $2.3 billion, impacted by COVID-19 related inventory reserves and lower pharmaceutical generics volumes.
What is the status of Cardinal Health's opioid litigation?
Cardinal Health announced a proposed settlement agreement in July 2021 to resolve the vast majority of opioid lawsuits filed by state and local governmental entities. The agreement includes a cash component of up to $6.37 billion, to be paid over 18 years, contingent on certain conditions being met. The company has accrued $6.73 billion for opioid litigation as of June 30, 2021.
How did COVID-19 impact Cardinal Health's segments?
COVID-19 negatively impacted both segments. The Medical segment saw increased demand for Personal Protective Equipment (PPE), leading to higher sourcing costs and an inventory reserve of $197 million for gloves due to declining selling prices and demand. The Pharmaceutical segment experienced volume declines in its generics program, though this impact improved year-over-year in the fourth quarter of fiscal 2021.
What significant divestitures or acquisitions occurred?
Cardinal Health completed the divestiture of its Cordis business in August 2021 for $927 million. This divestiture is expected to reduce annual Medical segment revenue by approximately $800 million and profit by $80 million. No significant acquisitions were completed in fiscal 2021.
06—Continue