Summary
Cardinal Health Inc. (CAH) announced a significant expansion of its receivables financing program through a Third Amendment to its Fourth Amended and Restated Receivables Purchase Agreement. This amendment, entered into on August 30, 2017, increases the committed receivables sales facility program from $700 million to $1.0 billion. This expansion suggests a strategic move by the company to enhance its liquidity and financial flexibility by leveraging its accounts receivable more effectively. In addition to the financing update, the company also disclosed a correction to its previously filed 10-K for the fiscal year ended June 30, 2017. The error pertained to the concentration of revenue from its largest customers, where the aggregate percentage was revised from 50% to 43%. While a relatively minor adjustment in percentage, it provides a more accurate picture of customer dependency for investors evaluating the company's revenue stability.
Key Highlights
- 1Cardinal Health's receivables financing facility has been increased from $700 million to $1.0 billion.
- 2This expansion is achieved through a Third Amendment to the Fourth Amended and Restated Receivables Purchase Agreement.
- 3The amendment enhances the company's liquidity and financial flexibility.
- 4Cardinal Health corrected an error in its FY2017 10-K regarding customer revenue concentration.
- 5The aggregate revenue from the five largest customers (including CVS and OptumRx) was revised from 50% to 43% of fiscal 2017 revenue.
- 6The amendment was effective as of August 30, 2017.