8-KFinancial EventsRegulation FDExhibits & Filings

CARDINAL HEALTH INC 8-K Report, Exit or Disposal Costs (Mar 31, 2009)

Filed March 31, 2009For Securities:CAH

Summary

Cardinal Health, Inc. (CAH) has filed an 8-K report detailing a significant restructuring plan impacting its Clinical and Medical Products segment, which is slated for a spin-off as CareFusion Corporation. This plan involves a reduction of approximately 1,300 global positions within the segment, split between layoffs and attrition, aimed at improving operational efficiency. Beyond the workforce reduction, Cardinal Health is implementing broader cost-saving initiatives across all its businesses. These measures are a direct response to prevailing economic conditions, including delayed hospital capital spending and a general global economic downturn. The company anticipates pre-tax restructuring costs of roughly $57 million, with a majority expected in fiscal year 2009, and expects the restructuring to conclude by mid-fiscal year 2010.

Key Highlights

  • 1Cardinal Health is undertaking a global workforce reduction of approximately 1,300 positions within its Clinical and Medical Products segment.
  • 2The restructuring efforts are primarily a response to delayed hospital capital spending and the broader decline in the global economy.
  • 3The company is implementing additional cost control measures and reducing discretionary spending across all business segments.
  • 4Estimated pre-tax costs associated with this restructuring plan are approximately $57 million.
  • 5Approximately $33 million of these costs are expected to be recognized in fiscal year 2009, with the remainder in fiscal year 2010.
  • 6The restructuring is expected to be completed by the middle of fiscal year 2010.
  • 7This announcement is related to the planned spin-off of the Clinical and Medical Products segment as CareFusion Corporation.

Frequently Asked Questions

The workforce reduction is primarily driven by a need to improve operational efficiency within the Clinical and Medical Products segment and to respond to broader economic challenges, including delayed hospital capital spending and a general decline in the global economy.

Approximately 1,300 employees are affected, with about 800 positions being eliminated through layoffs and an additional 500 through normal attrition and not filling open roles within the Clinical and Medical Products segment.

Cardinal Health estimates pre-tax costs associated with this restructuring plan to be approximately $57 million. Of this amount, roughly $33 million is expected to be incurred in fiscal year 2009, with the remaining costs anticipated in fiscal year 2010. These costs are employee-related and will result in future cash expenditures.

The company expects the restructuring plan to be completed by the middle of fiscal year 2010.