Fourth quarter revenue increased 12% to $59.9 billion Fourth quarter GAAP1 operating earnings were $401 million and GAAP diluted EPS was $0.96 Fourth quarter non-GAAP operating earnings increased 14% to $605 million and non-GAAP diluted EPS increased 29% to $1.84 Fiscal Year 2024 operating cash flow and adjusted free cash flow reached all-time highs of $3.8 billion and $3.9 billion, respectively Fiscal year 2025 non-GAAP EPS guidance raised to $7.55 to $7.70, from at least $7.50 DUBLIN, Ohio, Aug. 14, 2024 /PRNewswire/ -- Cardinal Health (NYSE: CAH) today reported fourth quarter fiscal year 2024 revenues of $59.9 billion, an increase of 12% from the prior year. GAAP operating earnings were $401 million and GAAP diluted earnings per share (EPS) were $0.96. Non-GAAP operating earnings increased 14% to $605 million, driven primarily by segment profit increases in Global Medical Products and Distribution (GMPD) and Pharmaceutical and Specialty Solutions. Non-GAAP diluted earnings per share (EPS) increased 29% to $1.84 in the quarter, reflecting the increase in non-GAAP operating earnings across the business, lower interest and other expense, a lower non-GAAP effective tax rate and a lower share count. Fiscal year 2024 revenues were $226.8 billion, an 11% increase from fiscal year 2023. GAAP operating earnings were $1.2 billion and GAAP diluted EPS was $3.45. Non-GAAP operating earnings increased 16% to $2.4 billion, driven primarily by segment profit increases in GMPD and Pharmaceutical and Specialty Solutions. Non-GAAP diluted EPS increased 29% to $7.53 for the year, reflecting the increase in non-GAAP operating earnings across the business, lower interest and other expense, a lower non-GAAP effective tax rate and a lower share count following in-year share repurchases. "Fiscal 2024 marked a year of strong operational execution and record financial results, delivered in tandem with key strategic progress in the portfolio," said Jason Hollar, CEO of Cardinal Health. "We delivered robust cash flow generation, continued profit growth in the Pharmaceutical and Specialty Solutions segment and significant improvement driven by our GMPD Improvement Plan. We enter the new fiscal year with momentum and confidence, evidenced by our raised fiscal year 2025 guidance." Q4 and full year FY24 summary2 Q4 FY24 Q4 FY23 Y/Y FY24 FY23 Y/Y Revenue $59.9 billion $53.4 billion 12 % $226.8 billion $205.0 billion 11 % Operating earnings/(loss) $401 million $111 million N.M. $1,243 million $752 million 65 % Non-GAAP operating earnings $605 million $530 million 14 % $2.4 billion $2.1 billion 16 % Net earnings/(loss) attributable to Cardinal Health, Inc. $235 million $(56) million N.M. $852 million $330 million N.M. Non-GAAP net earnings attributable to Cardinal Health, Inc. $450 million $367 million 23 % $1.9 billion $1.5 billion 21 % Effective Tax Rate3 40.4 % 160.3 % 28.9 % 50.0 % Non-GAAP Effective Tax Rate 24.6 % 29.1 % 21.7 % 22.8 % Diluted EPS attributable to Cardinal Health, Inc. $0.96 $(0.22) N.M. $3.45 $1.26 N.M. Non-GAAP diluted EPS attributable to Cardinal Health, Inc. $1.84 $1.43 29 % $7.53 $5.85 29 % Reflects revised prior period financials. See footnote 2 below for additional information regarding the immaterial corrections to results of prior periods. Segment results2 Pharmaceutical and Specialty Solutions segment Q4 FY24 Q4 FY23 Y/Y FY24 FY23 Y/Y Revenue $55.6 billion $49.4 billion 13 % $210.0 billion $188.8 billion 11 % Segment profit $482 million $448 million 8 % $2.0 billion $1.9 billion 7 % Fourth-quarter revenue for the Pharmaceutical and Specialty Solutions segment increased 13% to $55.6 billion, driven by brand and specialty pharmaceutical sales growth from existing customers. Pharmaceutical and Specialty Solutions segment profit increased 8% to $482 million in the fourth quarter, primarily driven by positive generics program performance. Global Medical Products and Distribution segment Q4 FY24 Q4 FY23 Y/Y FY24 FY23 Y/Y Revenue $3.1 billion $3.0 billion 2 % $12.4 billion $12.2 billion 1 % Segment profit $47 million $7 million N.M. $92 million $(147) million N.M. Fourth-quarter revenue for the Global Medical Products and Distribution segment increased 2% to $3.1 billion, driven by volume growth from existing customers. Global Medical Products and Distribution segment profit increased by $40 million to $47 million in the fourth quarter, driven by an improvement in net inflationary impacts, including mitigation initiatives. Other Q4 FY24 Q4 FY23 Y/Y FY24 FY23 Y/Y Revenue $1.2 billion $1.0 billion 15 % $4.5 billion $4.0 billion 12 % Segment profit $111 million $100 million 11 % $423 million $396 million 7 % Fourth-quarter revenue for Other increased 15% to $1.2 billion, driven by growth across the three operating segments: at-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics. Other segment profit increased 11% to $111 million, primarily driven by the performance of OptiFreight Logistics. Fiscal year 2025 outlook1The company raised its fiscal year 2025 outlook for non-GAAP diluted EPS to $7.55 to $7.70 from the preliminary outlook of at least $7.50 previously communicated during the company's third quarter fiscal year 2024 earnings release. The company updated its Pharmaceutical and Specialty Solutions segment profit growth outlook to 1% to 3% growth, from at least 1% growth. The company also improved its fiscal year 2025 outlooks for Interest and other, diluted weighted average shares outstanding and share repurchases4. Non-GAAP earnings per share $7.55 to $7.70 Pharmaceutical and Specialty Solutions segment: Revenue 4% to 6% decline5 Segment profit 1% to 3% growth Global Medical Products and Distribution segment: Revenue 3% to 5% growth Segment profit ~$175M Other: Revenue 10% to 12% growth Segment profit ~10% growth Interest and other $140M - $170M Non-GAAP effective tax rate 23.0% - 24.0% Diluted weighted average shares outstanding ~243M Share repurchases $750M Capital Expenditures $500M to $550M Non-GAAP adjusted free cash flow ~$1.0B6 Bold indicates a change to the preliminary FY25 outlook provided in the Q3 FY24 earnings release on May 2, 2024. The company does not provide forward-looking guidance on a GAAP basis as certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated. See "Use of Non-GAAP Measures" following the attached schedules for additional explanation. Business and portfolio review updateCardinal Health provided an update on its business and portfolio review focused on the Global Medical Products and Distribution segment: The company remains committed to maximizing shareholder value through execution of its GMPD Improvement Plan and reiterated its fiscal year 2026 target of approximately $300 million in segment profit. Additionally, by fiscal year 2026 the company is targeting at least $500 million in near-term value creation from GMPD through further simplification actions and working capital improvements, with the cash to be deployed according to its disciplined capital allocation framework. Therefore, the company is raising its share repurchase expectations in fiscal year 2025 by $250 million to a total of $750 million. As planned, the company's Business Review Committee sunset on July 15, with ongoing value creation efforts being overseen by the Board of Directors. Recent highlights Cardinal Health and CVS Health announced a joint venture, Averon, focused on increasing access for patients to lower cost specialty pharmaceuticals through the sourcing of biosimilars. Cardinal Health announced that it entered into a 5-year distribution agreement with leading southeast grocery chain, Publix. Cardinal Health announced the opening of its new Advanced Therapy Solutions Innovation Center, a specialized storage facility supporting the complex handling requirements of cell and gene therapies. Cardinal Health hosted its 32nd annual Retail Business Conference, bringing together 5,000 attendees from across the country to celebrate the critical role its independent pharmacy customers play in caring for their communities and highlight the company's innovations and commitment to its customers. Cardinal Health announced the opening of its new South Carolina distribution center for its at-Home Solutions business, featuring the fastest order fulfillment system in the market. The company also announced the openings of new GMPD distribution facilities in Massachusetts and Canada. Upcoming webcasted investor events Morgan Stanley 22nd Annual Global Healthcare Conference at 8:30 a.m. ET, September 5, 2024 Baird 2024 Global Healthcare Conference at 9:05 a.m. ET, September 10, 2024 WebcastCardinal Health will host a webcast today at 8:30 a.m. Eastern to discuss fourth quarter and full year results. To access the webcast and corresponding slide presentation, go to the Investor Relations page at ir.cardinalhealth.com. No access code is required.  Presentation slides and a webcast replay will be available until August 14, 2025. About Cardinal HealthCardinal Health is a distributor of pharmaceuticals, a global manufacturer and distributor of medical and laboratory products, and a provider of performance and data solutions for health care facilities. With more than 50 years in business, operations in more than 30 countries and approximately 48,000 employees globally, Cardinal Health is essential to care. Information about Cardinal Health is available at cardinalhealth.com.  ContactsMedia: Erich Timmerman, and 614.757.8231Investors: Matt Sims, and 614.553.3661 1GAAP refers to U.S. generally accepted accounting principles. This news release includes GAAP financial measures as well as non-GAAP financial measures, which are financial measures not calculated in accordance with GAAP. See "Use of Non-GAAP Measures" following the attached schedules for definitions of the non-GAAP financial measures presented in this news release and see the attached schedules for reconciliations of the differences between the non-GAAP financial measures and their most directly comparable GAAP financial measures.2Cardinal Health revised its prior period financials to correct an accounting error related to revenue recognition from third party payors within the at-Home Solutions operating segment. We evaluated the materiality of the error and determined that the impacts were not material, individually or in the aggregate, for any of the prior quarters or annual periods in which they occurred. In connection with these revisions, the company also corrected the timing of other unrelated immaterial errors, including an adjustment to an uncertain tax position, which were previously recorded in the periods the company identified them. The GAAP diluted EPS net impact of these prior period revisions is a $0.01 increase to the 9 months ending March 31, 2024, a $0.26 increase for fiscal year 2023 and a $0.02 decrease for fiscal year 2022. The non-GAAP diluted EPS net impact of these prior period revisions is a $0.07 increase for the 9 months ending March 31, 2024, a $0.06 increase for fiscal year 2023 and a $0.01 increase for fiscal year 2022.See accompanying schedules below and Notes 1 and 16 of the Notes to Consolidated Financial Statements included in the company's fiscal year 2024 Form 10-K for revised financials reflecting the immaterial corrections to results of prior periods.3Fluctuations in the GAAP effective tax rates are primarily due to the impact of goodwill impairments related to GMPD in each of the fiscal years. 4Updates to preliminary fiscal year 2025 outlook previously communicated during company's third quarter earnings release: non-GAAP diluted EPS previously of "At least $7.50", Pharmaceutical and Specialty Solutions segment profit growth of "At least 1%", Interest and other of $160M - $190M, diluted weighted average shares outstanding of 244M – 245M and share repurchases of $500M.5Reflects $39 billion revenue headwind due to OptumRx contract expiration, as previously communicated.6Reflects one-time unwinding of negative net working capital related to the OptumRx contract expiration and quarter-end day of week timing, as previously communicated. Cardinal Health uses its website as a channel of distribution for material company information. Important information, including news releases, financial information, earnings and analyst presentations, and information about upcoming presentations and events is routinely posted and accessible on the Investor Relations page at ir.cardinalhealth.com. In addition, the website allows investors and other interested persons to sign up automatically to receive email alerts when the company posts news releases, SEC filings and certain other information on its website. Cautions concerning forward-looking statementsThis release contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These statements may be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," "likely," and similar expressions, and include statements reflecting future results or guidance, statements of outlook and various accruals and estimates. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These risks and uncertainties include the risk that we may fail to achieve our strategic objectives, including the continued execution of the GMPD Improvement Plan, whether as a result of ongoing inflationary pressures or our expectations for Cardinal Health Brand sales; competitive pressures in Cardinal Health's various lines of business, including the risk that customers may reduce purchases made under their contracts with us or terminate or not renew their contracts or the risk that we may fail to offset the impact of a recent significant customer loss; the performance of our generics program, including the amount or rate of generic deflation and our ability to offset generic deflation and maintain other financial and strategic benefits through our generic sourcing venture or other components of our generics programs; ongoing risks associated with the distribution of opioids, including the financial impact associated with the settlements with governmental authorities, risks arising from the ongoing Department of Justice Investigations related to our anti-diversion program, and the risk that challenges to tax deductions for opioid-related losses could adversely impact our financial results; risks arising from our ongoing audits with the IRS, including the risk that the IRS may disagree with certain positions we have taken, which may result in an increase to our effective tax rate or other costs; risks associated with litigation matters, including an Department of Justice investigation focused on potential violations of the Anti-Kickback Statute and False Claims Act; our ability to manage uncertainties associated with the pricing of branded pharmaceuticals; the possibility that our At-Home unit goodwill could become impaired due to changes to our long-term financial plan, increases in global interest rates or unfavorable changes in the U.S. statutory tax rate. Cardinal Health is subject to additional risks and uncertainties described in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports. This release reflects management's views as of August 14, 2024. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement. Forward-looking statements are aspirational and not guarantees or promises that goals, targets or projections will be met, and no assurance can be given that any commitment, expectation, initiative or plan in this report can or will be achieved or completed. Cardinal Health provides definitions and reconciliations of non-GAAP financial measures and their most directly comparable GAAP financial measures at ir.cardinalhealth.com.    Schedule 1 Cardinal Health, Inc. and Subsidiaries  Consolidated Statements of Earnings/(Loss) (Unaudited) Fourth  Quarter Fiscal Year (in millions, except per common share amounts) 2024 2023 % Change 2024 2023 % Change Revenue $        59,867 $        53,421 12 % $       226,827 $       204,979 11 % Cost of products sold 57,985 51,637 12 % 219,413 198,105 11 % Gross margin 1,882 1,784 5 % 7,414 6,874 8 % Operating expenses: Distribution, selling, general and administrative expenses 1,277 1,254 2 % 5,000 4,800 4 % Restructuring and employee severance 69 33 175 95 Amortization and other acquisition-related costs 77 69 284 285 Impairments and (gain)/loss on disposal of assets, net 1 8 363 634 1,246 Litigation (recoveries)/charges, net 50 (46) 78 (304) Operating earnings/(loss) 401 111 N.M. 1,243 752 65 % Other (income)/expense, net 1 6 (9) 5 Interest expense, net 9 10 (10) % 51 84 (39) % Earnings before income taxes 391 95 N.M. 1,201 663 N.M. Provision for income taxes 2 158 153 3 % 348 332 5 % Net earnings/(loss) 233 (58) N.M. 853 331 N.M. Less: Net (earnings)/loss attributable to noncontrolling interests 2 2 (1) (1) Net earnings/(loss) attributable to Cardinal Health, Inc. $            235 $             (56) N.M. $            852 $            330 N.M. Earnings/(Loss) per common share attributable to Cardinal Health, Inc.: Basic $            0.96 $          (0.22) N.M. $            3.48 $            1.27 N.M. Diluted 0.96 (0.22) N.M. 3.45 1.26 N.M. Weighted-average number of common shares outstanding: Basic 244 254 245 261 Diluted 245 254 247 262 In connection with the preparation of our Consolidated Financial Statements for fiscal 2024, we identified an accounting error related to revenue recognition from third party payors within the at-Home Solutions operating segment. We evaluated the materiality of the error and determined that the impacts were not material, individually or in the aggregate, to our previously issued Consolidated Financial Statements for any of the prior quarters or annual periods in which they occurred.   We have revised our prior period financial statements to correct this error, as well as other unrelated immaterial errors, including an adjustment to an uncertain tax position. These revisions impacted each quarter of fiscal 2022, 2023 and 2024. These other immaterial errors were previously corrected in the periods they were identified; however, they are now reflected in the periods they originated. See "Notes to the Consolidated Financial Statements" included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 to be filed with the SEC. 1 Impairments and (gain)/loss on disposals of assets, net includes pre-tax goodwill impairment charges of $675 million related to the GMPD segment recorded in fiscal year ended June 30, 2024. During the three months and fiscal year ended June 30, 2023, impairments and (gain)/loss on disposals of assets, net included pre-tax goodwill impairment charges of $364 million and $1.2 billion related to the GMPD segment, respectively. 2 Provision for income taxes includes the tax effects relating to the cumulative goodwill impairment charges. For fiscal 2024 and 2023, the net tax benefits related to the goodwill impairment charges were $58 million and $92 million, respectively. The net tax expense during the three months ended June 30, 2023 related to goodwill impairment charges was $29 million.   Schedule 2 Cardinal Health, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) (in millions) June 30, 2024 June 30, 2023 Assets Current assets: Cash and equivalents $               5,133 $               4,076 Trade receivables, net 12,084 11,108 Inventories, net 14,957 16,119 Prepaid expenses and other 2,663 2,294 Assets held for sale 47 140 Total current assets 34,884 33,737 Property and equipment, net 2,529 2,461 Goodwill and other intangibles, net 6,450 6,085 Other assets 1,258 1,066 Total assets $              45,121 $              43,349 Liabilities and Shareholders' Deficit Current liabilities: Accounts payable $              31,759 $              29,934 Current portion of long-term obligations and other short-term borrowings 434 792 Other accrued liabilities 3,447 2,972 Liabilities related to assets held for sale — 42 Total current liabilities 35,640 33,740 Long-term obligations, less current portion 4,658 3,909 Deferred income taxes and other liabilities 8,035 8,657 Total shareholders' deficit (3,212) (2,957) Total liabilities and shareholders' deficit $              45,121 $              43,349 Amounts have been revised to reflect the correction of certain unrelated immaterial misstatements. See "Notes to the Consolidated Financial Statements" included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 to be filed with the SEC.   Schedule 3 Cardinal Health, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Fourth  Quarter Fiscal Year (in millions) 2024 2023 2024 2023 Cash flows from operating activities: Net earnings/(loss) $                233 $                (58) $                853 331 Adjustments to reconcile net earnings/(loss) to net cash provided by operating activities: Depreciation and amortization 186 176 710 692 Impairments and loss on sale of other investments 2 7 2 7 Impairments and (gain)/loss on disposal of assets, net 8 363 634 1,246 Share-based compensation 33 27 121 96 Benefit from deferred income taxes (104) (40) (104) (40) Provision for bad debts 8 7 36 55 Change in operating assets and liabilities, net of effects from acquisitions and divestitures:  Increase in trade receivables (773) (397) (996) (950)  (Increase)/decrease in inventories 2,373 567 1,115 (412)  Increase/(decrease) in accounts payable (294) 310 1,824 2,816  Other accrued liabilities and operating items, net 410 (91) (433) (997) Net cash provided by operating activities 2,082 871 3,762 2,844 Cash flows from investing activities: Acquisition of subsidiaries, net of cash acquired 2 — (1,190) (10) Proceeds from divestitures, net of cash sold — — 9 — Additions to property and equipment (193) (217) (511) (481) Proceeds from disposal of property and equipment 2 10 12 12 Purchase of investments (1) (1) (4) (7) Proceeds from investments — 2 1 3 Proceeds from net investment hedge terminations 6 — 34 29 Purchase of short-term investment in time deposit — — (550) — Proceeds from short-term investment in time deposit 350 — 350 — Net cash provided by/(used in) investing activities 166 (206) (1,849) (454) Cash flows from financing activities: Proceeds from long-term obligations, net of issuance costs — — 1,139 — Purchase of noncontrolling interests — (3) — (3) Reduction of long-term obligations (760) (8) (783) (579) Net tax proceeds from share-based compensation 23 45 46 56 Dividends on common shares (122) (126) (499) (525) Purchase of treasury shares — (500) (750) (2,000) Net cash used in financing activities (859) (592) (847) (3,051) Effect of exchange rates changes on cash and equivalents (2) (7) (9) (8) Net increase/(decrease) in cash and equivalents 1,387 66 1,057 (669) Cash and equivalents at beginning of period 3,746 4,010 4,076 4,745 Cash and equivalents at end of period $              5,133 $              4,076 $              5,133 $              4,076 Amounts have been revised to reflect the correction of certain unrelated immaterial misstatements. See "Notes to the Consolidated Financial Statements" included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 to be filed with the SEC.   Schedule 4 Cardinal Health, Inc. and Subsidiaries Segment Information (Unaudited) Fourth Quarter Pharmaceutical and Specialty Solutions Global Medical Products and Distribution Other (in millions) 2024 2023 2024 2023 2024