Cardinal Health 4th Qtr Earnings Inline

Cardinal Health Reports Fiscal 2008 Results, Provides Fiscal 2009 Outlook
Company Exploring Spin-Off of Clinical and Medical Products Businesses

· Annual revenue increases 5 percent to $91 billion
· GAAP diluted earnings per share from continuing operations increase 76 percent to $3.64 and 11 percent to $3.80 on a non-GAAP basis

· Fourth quarter revenue increases 3 percent to $23 billion, GAAP diluted earnings per share from continuing operations increase 51 percent to $0.92 and 9 percent to $0.97 on a non-GAAP basis
· Reserve taken in connection with settlement discussions with Drug Enforcement Administration
· Fiscal 2009 non-GAAP earnings per share expected to be $3.80 to $3.95 as company makes significant investments in R&D, IT

DUBLIN, Ohio, Aug. 7, 2008 —Cardinal Health, a global provider of products and services that improve the safety and productivity of health care, today reported an increase in fiscal 2008 revenue of 5 percent to $91 billion and a 76 percent increase in GAAP earnings per share (EPS) to $3.64. On a non-GAAP basis, EPS grew 11 percent to $3.801 for the year.

As the company had forecasted, the medical supply chain segment improved profit in the second half of the year, driven by double-digit growth in its core U.S. medical distribution business. Significant steps were taken in the pharmaceutical distribution business during the year to accelerate a recovery, which the company expects in the second half of fiscal 2009.

Results during the quarter and year continued to highlight growth within the company’s medical technology segments. Combined revenue for the Clinical Technologies and Services, and Medical Products and Technologies segments grew by 24 percent to $5.6 billion and profit increased 36 percent to nearly $800 million for the year.

Cardinal Health also announced that its board of directors has supported a management recommendation to actively explore a potential separation of the company’s primary operating and reporting segments, which could involve a tax-free spin-off of the clinical and medical products businesses as a separate, publicly traded company. Cardinal Health plans to announce its decision within approximately 60 to 90 days.

Cardinal (NYSE:CAH) last month consolidated its four operating units into two, and the board of directors has since supported a management recommendation to consider a tax-free spin-off of the clinical and medical products division into a separate publicly traded company, Cardinal said. The company plans to make a decision on the proposal in 60 to 90 days.
A spin-off would leave Cardinal with its original business of distributing pharmaceuticals and medical supplies, which accounts for 94 percent of revenue and 70 percent of profit.
“Our goal is simple: To have two thriving businesses delivering maximum value to customers and shareholders over the long term,” CEO R. Kerry Clark said in a release.