CareFusion Reports Preliminary First Quarter Fiscal 2013 Results

       CareFusion Reports Preliminary First Quarter Fiscal 2013 Results

Provides update on Form 10-K filing

PR Newswire

SAN DIEGO, Nov. 8, 2012

SAN DIEGO, Nov. 8, 2012 /PRNewswire/ --CareFusion Corp. (NYSE: CFN) today
reported preliminary results for its first quarter of fiscal 2013, ended Sept.
30, and provided an update on plans to file its Form 10-K for fiscal 2012.

"We had another quarter of solid strategic progress and strong execution
across the company, including balanced contributions from both segments," said
Kieran T. Gallahue, chairman and CEO. "Our Medical Systems and Procedural
Solutions segments performed in line with our expectations, putting us in a
good position as we begin the year.

"While we are not able to provide a full financial update today, we now have a
path toward completing the filing of our fiscal 2012 Form 10-K. As our Finance
team completes this necessary work, the rest of our organization remains
absolutely focused on our customers, as demonstrated in this quarter's

As previously disclosed, the company delayed the filing of its Form 10-K for
fiscal 2012 to consult with the SEC about its accounting policy for sales-type
leases in its Pyxis® medication and supply dispensing product lines. As a
result of these discussions, the company has determined that it will modify
the manner in which it applies lease accounting principles to its Pyxis
sales-type leases. The company is now in the process of analyzing the impact
on its financials. The modified application of lease accounting principles
will impact how the company records revenue for its sales-type leases. As a
result, the amount of revenue recorded at the inception of each lease and the
amount recorded as finance income during the term of each lease may change. In
some cases, more revenue may be recognized at the inception of the lease and,
in other cases, more revenue may be recognized as finance income during the
lease term. However, this should not result in any change in the total amount
of revenue recognized over the term of a lease. This matter also does not
affect CareFusion customers or the underlying fundamentals and cash flows of
the company or its Pyxis business.

Until this analysis is complete, CareFusion is unable to report its
consolidated financial results. Accordingly, the company today provided
selected operating and financial results compared to the quarter ended Sept.
30, 2011. These results are preliminary and remain subject to the completion
of the company's quarterly review and the filing of its Form 10-Q for the
quarter ended Sept. 30, 2012. Although the company plans to delay the filing
of its Form 10-Q with the SEC beyond the Nov. 9 due date, CareFusion intends
to file its Form 10-K and Form 10-Q as soon as possible after its accounting
analysis is complete.

Medical Systems

Within the Medical Systems segment, revenue for the Infusion Systems business
unit was ahead of company expectations, finishing the quarter at $203 million,
a 1 percent decline from the prior year period. CareFusion previously said
infusion revenue was expected to decline 5 percent during fiscal 2013
following a record year of infusion sales in fiscal 2012.

Revenue for the Respiratory Technologies business unit increased 4 percent
from the prior year period to $97 million, driven by continued strength in
ventilator sales that was partially offset by weakness in the respiratory
diagnostics portfolio. Beginning this quarter, CareFusion is reporting
financial results for its ventilation and respiratory diagnostics businesses
together to reflect a change in the company's organizational structure.

Dispensing Technologies had another strong quarter, delivering results in line
with company expectations. While CareFusion is unable to provide specific
financial performance for its Dispensing Technologies business unit until it
completes the analysis regarding its sales-type leases, the underlying
fundamentals of the business, as well as the competitive landscape, remain
unchanged. The company continues to execute well with the rollout of its new
product platform and expand its business outside the U.S.

Procedural Solutions

First quarter revenue for the Procedural Solutions segment was $286 million,
an increase of 1 percent from the prior year period. Segment profit increased
24 percent to$41 million, a 14 percent increase to $48 million on an adjusted

Within the segment, revenue for the Infection Prevention business unit reached
$144 million, a 4 percent increase from the prior year period based on strong
sales growth of the company's clinically differentiated preoperative skin
preparation and infusion specialty disposables product lines.

Contributions from the June 2012 acquisition of U.K. Medical and growth in the
company's clinically differentiated interventional specialties portfolio drove
a 3 percent increase in revenue in the Medical Specialties business unit to
$80 million from $78 million in the prior year period.

As expected, revenue in the Specialty Disposables business unit declined,
closing the quarter at $62 million, or 6 percent lower than the prior year
period, as the company transitions its business model and portfolio of

Additional financial results

Operating expenses during the quarter totaled $293 million, a decrease of 5
percent from the prior year period. Excluding nonrecurring items and
amortization of acquired intangibles, adjusted operating expenses decreased 1
percent to $276 million.

Selling, general and administrative (SG&A) expenses also fell during the
quarter to $244 million, an 8 percent decrease from the prior year period.
These ongoing cost-savings initiatives helped fund additional investments in
research and development, which increased 27 percent to $47 million during the
quarter. Adjusted SG&A expenses were $229 million, decreasing 5 percent from
$242 million in the prior year period.

Operating cash flow from continuing operations was $78 million, an increase of
$75 million over the prior year period.

Recent Highlights

Additional first quarter and recent highlights included:

  oExpanding CareFusion's global reach and respiratory product portfolio with
    a definitive agreement to acquire Intermed Equipamento Medico Hospitalar
    Ltda, a privately held, leading respiratory technologies company based in
    Sao Paulo, Brazil.The acquisition, which is expected to close this month,
    advances CareFusion's strategy to expand outside of the U.S. through
    investments that build scale and local capabilities in high-value
  oPreviewing outside of the U.S. the Rowa Dose System, a new, automated
    concept for continuously packaging medication dosages for individual
    patients. The development of this new offering was accelerated through the
    acquisition of an early-stage technology in the fourth quarter of fiscal
  oLaunching a new $500,000 Clinical Excellence grant program from the
    CareFusion Foundation to help identify and share infection prevention best
    practices across hospitals and health care facilities nationwide.
  oAdvancing CareFusion's system connectivity and device interoperability
    strategy by closely integrating the company's Pyxis medication dispensing
    technologies with Cerner's electronic health record system to help
    hospitals improve medication management and clinical workflows. This new
    offering, currently in limited release, is the latest development under a
    2010 strategic agreement between CareFusion and Cerner that has also
    enabled the companies to connect Alaris®infusion pumps and theCareFusion
    Ventilation Systemwith Cerner'sCareAware iBusandCerner Millennium.
  oReceiving 510(k) clearance from the U.S. Food and Drug Administration
    (FDA) for CareFusion's new Snowden-Pencer® take-apart laparoscopic
    scissors, the latest addition to the company's line of take-apart
    laparoscopic surgical instruments designed to facilitate sterilization and
    enhance ergonomics and performance. Currently in limited market release,
    the new Snowden-Pencer laparoscopic scissors are expected to be
    commercially available in early 2013.

Conference Call

CareFusion will host a webcast and conference call today at 2 p.m. PST (5 p.m.
EST) to discuss the financial and operational results for the first quarter.

To access the call, visit the Investors page at Log on at
least 15 minutes before the call begins to register and download or install
any necessary audio software.

Investors and other interested parties may also access the call by dialing
(800) 599-9795 within the U.S. or (617) 786-2905 from outside the U.S., and
use the access code 70745464. A replay of the conference call will be
available from 4 p.m. PST (7 p.m. EST) on Nov. 8 through 8:59 p.m. PST (11:59
p.m. EST) on Nov. 15 and can be accessed by dialing (888) 286-8010 in the U.S.
or (617) 801-6888 internationally and using the access code 35047396.

About CareFusion Corporation

CareFusion (NYSE: CFN) is a global corporation serving the health care
industry with products and services that help hospitals measurably improve the
safety and quality of care. The company develops market-leading technologies
including Alaris® infusion pumps, Pyxis® automated dispensing and patient
identification systems, AVEA®, AirLife™ and LTV® series ventilation and
respiratory products, ChloraPrep® skin prep products, MedMined® services for
data mining surveillance, V. Mueller® surgical instruments, and an extensive
line of products that support interventional medicine. CareFusion employs more
than 15,000 people across its global operations. More information may be found

Use of Non-GAAP Financial Measures by CareFusion Corporation

This CareFusion news release and the information contained herein present
non-GAAP financial measures that exclude certain amounts, as follows:
"adjusted SG&A expenses," which exclude amortization of acquired intangibles,
as well as nonrecurring items related to the spinoff; and "adjusted operating
expenses," and "adjusted segment profit," which exclude amortization of
acquired intangibles, as well as nonrecurring items related to the spinoff and
restructuring and acquisition integration charges. The most directly
comparable GAAP financial measures for these non-GAAP financial measures are
SG&A expenses, operating expenses and segment profit. The company has included
below unaudited adjusted financial information for the quarters ended
September 30, 2012 and 2011, which includes a reconciliation of GAAP to
non-GAAP financial measures.

The company's management uses these non-GAAP financial measures to evaluate
the company's performance and provides them to investors as a supplement to
the company's reported results, as they believe this informationprovides
additional insight into the company's operating performance by disregarding
certain non-recurring items. These non-GAAP financial measures should not be
considered in isolation, as a substitute for, or as superior to, financial
measures calculated in accordance with GAAP, and the company's financial
results calculated in accordance with GAAP and reconciliations to those
financial statements should be carefully evaluated.The non-GAAP financial
measures used by the company may be calculated differently from, and therefore
may not be comparable to, similarly titled measures used by other
companies.While the types of items and charges excluded from the company's
non-GAAP financial measures may occur in the future, the company's management
believes that they are not reflective of the day-to-day offering of its
products and services and relate more to strategic, multi-year corporate
actions, without predictable trends, or discrete and unusual or infrequent
transactions that are not indicative of future operations or business trends.

Cautions Concerning Forward-looking Statements

The CareFusion news release and the information contained herein present
forward-looking statements addressing expectations, prospects, estimates and
other matters that are dependent upon future events or developments. The
matters discussed in these forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
projected, anticipated or implied. The most significant of these uncertainties
are described in CareFusion's Form 10-K, Form 10-Q and Form 8-K reports
(including all amendments to those reports) and exhibits to those reports, and
include (but are not limited to) the following: the modified application of
lease accounting principles to our sales-type leases and the potential impact
on our reported financial results and financial guidance; the timing for
filing our Form 10-K for fiscal 2012 and Form 10-Q for the first quarter of
fiscal 2013; we may be unable to effectively enhance our existing products or
introduce and market new products or may fail to keep pace with advances in
technology; we are subject to complex and costly regulation; cost containment
efforts of our customers, purchasing groups, third-party payers and
governmental organizations could adversely affect our sales and profitability;
current economic conditions have and may continue to adversely affect our
results of operations and financial condition; we may be unable to realize any
benefit from our cost reduction and restructuring efforts and our
profitability may be hurt or our business otherwise might be adversely
affected; we may be unable to protect our intellectual property rights or may
infringe on the intellectual property rights of others; defects or failures
associated with our products and/or our quality system could lead to the
filing of adverse event reports, recalls or safety alerts and negative
publicity and could subject us to regulatory actions; we are currently
operating under an amended consent decree with the FDA and our failure to
comply with the requirements of the amended consent decree may have an adverse
effect on our business; and our success depends on our key personnel, and the
loss of key personnel or the transition of key personnel, including our chief
executive officer, could disrupt our business. The CareFusion news release and
the information contained herein reflect management's views as of Nov. 8,
2012. Except to the limited extent required by applicable law, CareFusion
undertakes no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

                                                      Quarter Ended Percent
                                                      September 30,
(in millions)                                         2012   2011   Change
    Medical Systems^2
    Infusion Systems                                  $ 203  $ 206  (1) %
    Respiratory Technologies^3                        97     93     4
    Other                                             7      6      17
    Procedural Solutions^4
    Infection Prevention                             $ 144  $ 138  4 %
    Medical Specialties                               80     78     3
    Specialty Disposables                             62     66     (6)
     Total Procedural Solutions                     $ 286  $ 282  1
    Selling, General and Administrative Expenses      $ 244  $ 264  (8) %
    Research and Development Expenses                 47     37     27
    Restructuring and Acquisition Integration Charges 2      7      (71)
    Interest Expense and Other, Net                  $ 20   $ 25   (20) %
    Loss from Discontinued Operations, Net of Tax     (5)    (2)    150
    Basic                                             221.9  223.8
    Diluted                                           224.4  226.3
Adjusted Financial Measures:^5
    Operating Expenses                                $ 276  $ 279

  All results are preliminary and remain subject to the completion of the
1 company's quarterly review and the filing of its Form 10-Q for the quarter
  ended Sept. 30, 2012, including the completion of the company's analysis
  regarding its Dispensing sales-type leases, as discussed above.
  Revenue for the Dispensing Technologies business unit intentionally omitted.
2 As discussed above, until the analysis regarding the company's Dispensing
  sales-type leases is complete, the company is unable to report the financial
  results for its Dispensing Technologies business.
  In July, 2012, the company began managing its Respiratory Diagnostics
  business as part of its Respiratory Technologies business unit within the
3 Medical Systems reporting segment. Previously, the Respiratory Diagnostics
  business had been reported in Procedural Systems as Other. Prior period
  financials have been reclassified to conform to the current presentation.
4 Reflects the impact of businesses reclassified to discontinued
  Adjusted financial measures are non-GAAP measures that exclude certain
  nonrecurring items, as discussed above under Use of Non-GAAP Financial
5 Measures. These measures are reconciled to comparable GAAP measures in the
  Reconciliation of Non-GAAP Financial Measures included on the following

Adjusted Financial Data:
                                    Segment Profit
                                    Procedural      SG&A       Operating
(in millions)                       Solutions       Expenses^5 Expenses^5,6
Quarter Ended September 30, 2012
GAAP                                $ 41            $ 244      $ 293
 Restructuring and Acquisition    1               -          (2)
 Amortization of acquired         6               (15)       (15)
Adjusted                            $ 48            $ 229      $ 276
Quarter Ended September 30, 2011
GAAP                                $ 33            $ 264      $ 308
 Restructuring and Acquisition    2               -          (7)
 Spinoff^3                        2               (4)        (4)
 Amortization of acquired         5               (18)       (18)
Adjusted                            $ 42            $ 242      $ 279

  All results are preliminary and remain subject to the completion of the
1 company's quarterly review and the filing of its Form 10-Q for the quarter
  ended Sept. 30, 2012, including the completion of the company's analysis
  regarding its Dispensing sales-type leases, as discussed above.
  Restructuring and acquisition integration charges primarily relate to
2 nonrecurring expenses associated with closing and consolidating facilities,
  as well as rationalizing headcount, and aligning operations.
3 Spinoff charges primarily relate to nonrecurring incremental expenses
  associated with our spinoff from Cardinal Health, Inc.
  Amortization of acquired intangibles relate to the non-cash expenses
4 associated with amortization of identifiable intangible assets of acquired
5 Reflects company expenses on a consolidated basis.
6 Operating expenses consist of selling, general and administrative, research
  and development, and restructuring and acquisition integration expenses.

SOURCE CareFusion Corp.

Contact: Media: Kristen Cardillo, +1-858-617-2317,; Investors: Jim Mazzola, +1-858- 617-1203,
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