Summary
Cardinal Health, Inc. reported solid financial performance for the nine months ended March 31, 2001, with total revenue growing 28% to $35.5 billion, driven primarily by its Pharmaceutical Distribution and Provider Services segment. Net earnings for the period reached $604.1 million, an increase from $511.8 million in the prior year. The company has also been actively engaged in strategic acquisitions, most notably the merger with Bindley Western Industries, Inc. (Bindley) completed in February 2001, accounted for as a pooling of interests. This report details the financial results, including the impact of this significant merger and other acquisitions, alongside ongoing operational activities.
Key Highlights
- 1Total revenue for the nine months ended March 31, 2001, increased 28% to $35.5 billion, up from $27.8 billion in the prior year.
- 2Net earnings for the nine months ended March 31, 2001, rose to $604.1 million from $511.8 million in the comparable period of 2000.
- 3The company completed a significant merger with Bindley Western Industries, Inc. in February 2001, accounted for as a pooling of interests.
- 4Merchandise inventories saw a substantial increase, rising to $6.1 billion at March 31, 2001, from $4.7 billion at June 30, 2000, indicating growth in business volume.
- 5Total special charges, primarily related to merger and integration costs, amounted to $106.6 million for the nine months ended March 31, 2001, impacting net earnings.
- 6The Pharmaceutical Distribution and Provider Services segment remains the largest contributor, with operating revenue of $22.9 billion for the nine months.
- 7The company's cash and equivalents decreased to $396.2 million from $539.5 million, partly due to investing activities and acquisitions.
Frequently Asked Questions
The merger with Bindley Western Industries, Inc. (Bindley) in February 2001 was accounted for as a pooling of interests. This means the financial statements of both companies have been combined retroactively, reflecting the combined entity's results as if it had always existed. This significantly impacted revenue, assets, and liabilities as presented in the condensed consolidated financial statements.
Cardinal Health incurred significant special charges, totaling $106.6 million for the nine months ended March 31, 2001, primarily related to merger and integration costs (e.g., transaction costs, employee-related costs, exit costs, restructuring, and integration). These charges reduced net earnings by $73.8 million after tax, impacting reported diluted earnings per share by $0.16.
Merchandise inventories increased substantially to $6.1 billion as of March 31, 2001, up from $4.7 billion at June 30, 2000. This increase is attributed to higher volume in pharmaceutical distribution activities, investments in inventory for vendor-margin programs, and potentially the inclusion of acquired businesses.
Cardinal Health reported increased working capital and maintained access to significant financing. This includes a commercial paper program, a $1.5 billion unsecured bank credit facility, and the ability to issue additional debt or equity under a shelf registration statement. The company believes it has adequate capital resources to fund its operations, growth, and debt obligations.