10-KPeriod: FY2024

CARDINAL HEALTH INC Annual Report, Year Ended Jun 30, 2024

Filed August 14, 2024For Securities:CAH

Summary

Cardinal Health, Inc. reported strong revenue growth of 11% to $226.8 billion for fiscal year 2024, driven primarily by its Pharmaceutical and Specialty Solutions segment. Despite this top-line expansion, the company experienced a significant goodwill impairment charge of $675 million related to its Global Medical Products and Distribution (GMPD) segment, which fully impaired the goodwill for that segment. Non-GAAP diluted EPS showed substantial growth, increasing by 29% to $7.53, reflecting improved operational performance excluding these non-recurring charges. The company also announced the expiration of its pharmaceutical distribution contracts with OptumRx at the end of June 2024, which is expected to negatively impact fiscal 2025 results. However, the recent acquisition of Specialty Networks for $1.2 billion is anticipated to bolster the Pharmaceutical and Specialty Solutions segment. Cardinal Health maintained its focus on capital deployment, returning capital to shareholders through share repurchases and dividends, while managing its debt obligations and accruing significant reserves for opioid-related litigation.

Financial Highlights

51 data points
Beta

Revenue

$226.83B

3.3% Gross Margin

Net Income

$852.00M

0.4% Net Margin

EPS (Diluted)

$3.45

Total Assets

$45.12B

Cash & Equivalents

$5.13B

Free Cash Flow

$3.25B

Financial Statements
Beta
Revenue$226.83B
Cost of Revenue$219.41B
Gross Profit$7.41B
SG&A Expenses$5.00B
Operating Income$1.24B
Interest Expense$51.00M
Net Income$852.00M
EPS (Basic)$3.48
EPS (Diluted)$3.45
Shares Outstanding (Basic)245.00M
Shares Outstanding (Diluted)247.00M

Key Highlights

  • 1Total revenue increased by 11% to $226.8 billion in fiscal year 2024.
  • 2Pharmaceutical and Specialty Solutions segment revenue grew by 11%, driven by branded and specialty pharmaceutical sales.
  • 3Global Medical Products and Distribution (GMPD) segment experienced a $675 million goodwill impairment charge, fully impairing the goodwill for this segment.
  • 4Non-GAAP diluted EPS increased by a strong 29% to $7.53.
  • 5The company completed the $1.2 billion acquisition of Specialty Networks to expand its offerings in key therapeutic areas.
  • 6The expiration of OptumRx contracts is expected to negatively impact fiscal 2025 results.
  • 7Cardinal Health made significant payments and prepayments related to opioid litigation settlements, totaling $378 million in annual payments and $239 million in prepayments during fiscal 2024.

Frequently Asked Questions

Cardinal Health announced that its pharmaceutical distribution contracts with OptumRx expired at the end of June 2024. Sales to OptumRx represented 17% of consolidated revenue in fiscal 2024. The company expects this expiration to adversely impact its results of operations, including segment profit and operating cash flow, in fiscal year 2025.

Cardinal Health recorded a $675 million pre-tax goodwill impairment charge in fiscal year 2024 related to its Global Medical Products and Distribution (GMPD) segment. This charge fully impaired the goodwill allocated to the GMPD segment. While this impacted GAAP operating earnings and EPS, the company presented non-GAAP measures that exclude such impairments to provide a view of ongoing business performance.

The company completed the acquisition of Specialty Networks for $1.2 billion in cash in March 2024. This acquisition is expected to expand Cardinal Health's offerings in key therapeutic areas, accelerate data and research opportunities, and create a platform for expansion. This strategic move is anticipated to positively impact the Pharmaceutical and Specialty Solutions segment revenue and profit.

Cardinal Health has accrued $5.4 billion for opioid-related matters as of June 30, 2024. The company has entered into a National Opioid Settlement Agreement to resolve the majority of claims from states and local governmental entities, agreeing to pay up to approximately $6.3 billion over 18 years. During fiscal year 2024, the company made its third annual payment of $378 million and also made prepayments of $239 million at a discount to settle certain future payment obligations.