01—Abstract
Summary
Summary of the 10-K filed August 11, 2022. Cited figures are marked; the original filing is the authoritative source.
Cardinal Health, Inc. reported total revenue of $181.4 billiona for fiscal year 2022, representing a 12% increase from the prior year, primarily driven by growth in its Pharmaceutical segment.
Despite revenue growth, the company incurred a GAAP operating loss of $596 millionb, largely due to a significant $2.1 billion pre-tax goodwill impairment charge related to its Medical segment. The non-GAAP operating earnings decreased by 12% to $2.0 billion, primarily impacted by inflationary pressures and supply chain constraints in the Medical segment.
A substantial development during the year was the effective date of the National Settlement for opioid lawsuits, involving up to approximately $6.0 billionc in payments over 18 years. The company's liquidity remains strong, with cash and equivalents increasing to $4.7 billion, supported by operating activities and the divestiture of the Cordis business.
02—Key points
Key Highlights
- Total revenue increased by 12% to $181.4 billion, driven by the Pharmaceutical segment.
- Reported a GAAP operating loss of $596 million, primarily due to a $2.1 billion goodwill impairment charge in the Medical segment.
- Non-GAAP operating earnings decreased by 12% to $2.0 billion, reflecting inflationary impacts and supply chain constraints in the Medical segment.
- The company made significant progress on the opioid litigation, with the National Settlement becoming effective, involving up to $6.0 billion in payments over 18 years.
- Cash and equivalents increased to $4.7 billion, indicating a strong liquidity position.
- Divested the Cordis business, impacting Medical segment revenue and profit.
- Continued to pay dividends and engage in share repurchases, returning capital to shareholders.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2022, Cardinal Health Inc lost $0.01.
- Revenue$181.33B100.0%
- Cost of revenue−$174.84B96.4%
- Gross profit$6.48B3.6%
- Operating costs−$7.09B3.9%
- Operating income−$607.0M0.3%
- Interest, other & tax−$331.0M0.2%
- Net income−$938.0M0.5%
04—Financials
Financial Highlights
Figures from 10-KFY2022filed August 11, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $181.33B$162.47B | +11.6% |
| Cost of Revenue | $174.84B$155.69B | +12.3% |
| Gross Profit | $6.48B$6.78B | −4.3% |
| SG&A Expenses | $4.51B$4.53B | −0.5% |
| Operating Income | -$607.00M$472.00M | −228.6% |
| Interest Expense | $147.00M$180.00M | −18.3% |
| Net Income | -$938.00M$611.00M | −253.5% |
| EPS (Basic) | $-3.37$2.09 | −261.2% |
| EPS (Diluted) | $-3.37$2.08 | −262.0% |
| Shares Outstanding (Basic) | 279.00M292.00M | −4.5% |
| Shares Outstanding (Diluted) | 279.00M294.00M | −5.1% |
05—Questions
Frequently Asked Questions
What was the primary driver of Cardinal Health's revenue growth in fiscal year 2022?
Cardinal Health's revenue grew by 12% to $181.4 billion, primarily driven by sales growth in its Pharmaceutical segment, specifically from pharmaceutical distribution and specialty pharmaceutical customers.
What caused the significant goodwill impairment charge in the Medical segment?
The $2.1 billion goodwill impairment charge in the Medical segment was primarily due to adverse financial results stemming from inflationary impacts, global supply chain constraints, and lower volumes in personal protective equipment (PPE). An increase in the risk-free interest rate used in valuation also contributed.
What is the status of the opioid litigation settlement?
The National Settlement for the majority of opioid lawsuits became effective on April 2, 2022. Cardinal Health expects to pay up to approximately $6.0 billion over 18 years as part of this settlement, which also includes injunctive relief related to controlled substance anti-diversion programs.
How did the divestiture of the Cordis business impact the company's financial performance?
The divestiture of the Cordis business adversely impacted the Medical segment's revenue by approximately $700 million and profit by $70 million in fiscal year 2022. It also led to a decrease in amortization of acquisition-related intangible assets.
06—Continue