Pharmaceutical Distribution Agreement Between Cardinal Health And Walgreens To End August 2013

Pharmaceutical Distribution Agreement Between Cardinal Health And Walgreens To
                               End August 2013

PR Newswire

DUBLIN, Ohio, March 19, 2013

DUBLIN, Ohio, March 19, 2013 /PRNewswire/ --Cardinal Health announced today
that its pharmaceutical distribution contract with Walgreen Co. (Walgreens),
which is scheduled to expire at the end of August 2013, will not be renewed.

"Although we are not yet ready to provide fiscal 2014 earnings guidance, our
portfolio has considerable balance and we have prepared strategies to mitigate
the impact of a Walgreens nonrenewal. Based on this, we will target a 2014
non-GAAP diluted earnings per share from continuing operations^1 to be at
least similar to the fiscal year 2013 guidance range of $3.42 to $3.50 we
provided in our fiscal 2013 second quarter earnings release. We intend to
provide more color on fiscal 2014 during our fiscal 2013 third and fourth
quarter earnings calls," said George Barrett, Chairman and CEO.

The company also noted that earnings for the current fiscal year 2013 would
not be negatively impacted as the current Walgreens agreement remains in place
throughout fiscal 2013.

Sales to Walgreens, one of Cardinal Health's two largest customers, generated
approximately 21 percent of consolidated revenue for fiscal 2012. For this
period, approximately 60 percent of revenue from Walgreens was classified as
bulk sales, which, as described in the Form 10-K for the fiscal year ended
June 30, 2012, has significantly lower segment profit as a percentage of
revenue than non-bulk sales. Walgreens bulk and non-bulk sales have
meaningfully less segment profit as a percentage of revenue than average bulk
and non-bulk sales. After the expiration of this contract, the company also
anticipates a significant net working capital decrease based on reduced
inventory and accounts receivable, partially offset by reduced accounts
payable. Based on the expected working capital decrease and other factors, it
is anticipated that the expiration of the Walgreens contract will result in a
meaningful net, after-tax benefit to cash flow from operating activities in
fiscal 2014.

^1(1) Non-GAAP diluted earnings per share from continuing operations:
earnings from continuing operations (A) excluding (1) restructuring and
employee severance, (2) acquisition-related costs (including amortization of
acquisition-related intangible assets), (3) impairments and loss on disposal
of assets, (4) litigation (recoveries)/charges, net, and (5) other spinoff
costs, each net of tax, (B) divided by diluted weighted average shares
outstanding.

Non-GAAP Financial Measures
Cardinal Health presents non-GAAP diluted earnings per share from continuing
operations on a forward-looking basis. The most directly comparable
forward-looking GAAP measure is diluted earnings per share from continuing
operations. The company is unable to provide a quantitative reconciliation of
this forward- looking non-GAAP measure to the most directly comparable
forward-looking GAAP measure, because the company cannot reliably forecast
restructuring and employee severance, acquisition-related costs (including
amortization of acquisition-related intangible assets), impairments and loss
on disposal, and litigation (recoveries)/charges, which are difficult to
predict and estimate. Please note that the unavailable reconciling items could
significantly impact the company's future financial results.

About Cardinal Health
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE: CAH) is a $108
billion health care services company that improves the cost-effectiveness of
health care. As the business behind health care, Cardinal Health helps
pharmacies, hospitals, ambulatory surgery centers and physician offices focus
on patient care while reducing costs, enhancing efficiency and improving
quality. Cardinal Health is an essential link in the health care supply chain,
providing pharmaceuticals and medical products to more than 60,000 locations
each day. The company is also a leading manufacturer of medical and surgical
products, including gloves, surgical apparel and fluid management products. In
addition, the company supports the growing diagnostic industry by supplying
medical products to clinical laboratories and operating the nation's largest
network of radiopharmacies that dispense products to aid in the early
diagnosis and treatment of disease. Ranked #21 on the Fortune 500, Cardinal
Health employs more than 30,000 people worldwide. More information about the
company may be found at cardinalhealth.com and @CardinalHealth on Twitter.

Cautions Concerning Forward-Looking Statements
This news 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
expense accruals. 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 uncertainties
relating to the ability of Cardinal Health to successfully implement measures
to mitigate the impact of the expiration of the pharmaceutical distribution
contract with Walgreen Co. at the end of August 2013; the ability to achieve
the expected benefits from the AssuraMed acquisition, including the expected
accretion in earnings; competitive pressures in Cardinal Health's various
lines of business; the loss of one or more key customer or supplier
relationships or changes to the terms of those relationships, including CVS
Caremark Corporation, whose contract currently is scheduled to expire in June
2013; the timing of generic and branded pharmaceutical introductions and the
frequency or rate of pharmaceutical price appreciation or deflation;
uncertainties due to government health care reform including federal health
care reform legislation; changes in the distribution patterns or reimbursement
rates for health care products and services; the effects of any investigation
or action by any regulatory authority; changes in the cost of commodities such
as oil-based resins, cotton, latex and diesel fuel; uncertainties concerning
Cardinal Health's ability to achieve the expected benefits of its Medical
segment's business transformation project. 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 news
release reflects management's views as of March 19, 2013. Except to the extent
required by applicable law, Cardinal Health undertakes no obligation to update
or revise any forward-looking statement.

SOURCE Cardinal Health

Website: http://www.cardinalhealth.com
Contact: Media - Debbie Mitchell, +1-614-757-6225,
debbie.mitchell@cardinalhealth.com, or Investors - Sally Curley,
+1-614-757-7115, sally.curley@cardinalhealth.com
 
Press spacebar to pause and continue. Press esc to stop.