CareFusion Reports Third Quarter Fiscal 2013 Results

             CareFusion Reports Third Quarter Fiscal 2013 Results

- Revenue of $901 million in line with company expectations

- GAAP operating margins of 15 percent increased to 22.3 percent on an
adjusted basis

- GAAP diluted earnings per share (EPS) from continuing operations totaled
$0.37, including the impact of a previously disclosed reserve for an expected
government settlement

- Adjusted diluted EPS from continuing operations increased 5 percent to $0.59

PR Newswire

SAN DIEGO, May 9, 2013

SAN DIEGO, May 9, 2013 /PRNewswire/ --CareFusion Corp. (NYSE: CFN), a
leading, global medical technology company, today reported results for the
three and nine months ended March 31, 2013.

"We continued to make good progress during the quarter on our strategies to
build an efficient foundation across our businesses," said Kieran T. Gallahue,
chairman and CEO. "I'm proud of our team's continued, disciplined efforts to
reduce expenses, expand margins and fund investments in research and
development and other growth initiatives.

"Our team executed well in the third quarter, with Medical Systems performing
as we expected. The Procedural Solutions segment delivered strong top- and
bottom-line results on solid performance across all three businesses and
continued strength in our clinically differentiated portfolio."

Third Quarter Results

The company reported revenue for the third quarter of $901 million, compared
to $919 million in the third quarter of fiscal 2012, a decrease of 2 percent
on a reported and constant currency basis.

Operating income was $135 million, including the impact of a previously
disclosed $41 million charge to establish a reserve for an expected government
settlement, which the company announced April 25.

Excluding nonrecurring items, adjusted operating income rose 5 percent to $201
million, driven by continued gross margin expansion and improved operating
margins. Nonrecurring items include the impact of the reserve for the expected
government settlement. (See "Use of Non-GAAP Financial Measures" below.)

Operating expenses totaled $341 million. Excluding nonrecurring items,
adjusted operating expenses were $275 million, an increase of 3 percent over
the prior year period. During the quarter, the company increased investments
in R&D by 4 percent and absorbed the impact of the medical device excise tax.


Operating margins were 15 percent during the quarter and increased 140 basis
points to 22.3 percent on an adjusted basis as a result of gross margin
leverage and the company's continued efforts to improve profitability through
disciplined expense management initiatives.

The company reported income from continuing operations of $84 million, or
$0.37 per diluted share. These results include the impact of the reserve for
the expected government settlement, which affected after-tax results by $0.15
per diluted share.

Adjusted income from continuing operations increased 6 percent from the prior
year period to $134 million, or $0.59 per diluted share. The adjusted
effective tax rate was 27.1 percent.

Medical Systems

Third quarter revenue for the Medical Systems segment was $584 million, a 6
percent decrease from the prior year period on a reported and constant
currency basis. Expected declines in the Dispensing Technologies business unit
from a product line transition was the primary driver of the decrease over a
strong comparable period.

Segment profit for the quarter increased 3 percent from the prior year period
to $122 million on stronger gross margins and expense control. Adjusted
segment profit increased 1 percent to $139 million.

Procedural Solutions

Third quarter revenue for the Procedural Solutions segment totaled $317
million, a 6 percent increase from the prior year period on a reported and
constant currency basis. Segment growth was led by the Medical Specialties and
Specialty Disposables business units, where continued strength of its
clinically differentiated offerings drove double-digit revenue increases.

Sales growth and strong expense management efforts helped drive segment profit
of $54 million, an increase of 26 percent from the prior year period. Adjusted
segment profit grew 15 percent to $62 million.

Nine Month Results

For the first nine months of fiscal 2013, revenue was nearly even with the
prior year period at $2.65 billion. Operating income increased 7 percent to
$449 million from $419 million in the prior year period. Income from
continuing operations was $279 million, or $1.24 per diluted share. Adjusted
income from continuing operations increased 7 percent from the prior year
period to $354 million, or $1.57 per diluted share.

Operating expenses in the first nine months totaled $934 million, or $833
million on an adjusted basis. The company increased R&D investments 20 percent
to $142 million, reflecting the company's continued focus on product
development and innovation.

For the first nine months, operating margins increased to 17 percent and
reached 20.8 percent on an adjusted basis.

Within the Medical Systems segment, revenue decreased 2 percent from the prior
year period to $1.74 billion. Segment profit increased 10 percent to $347
million and increased 3 percent to $385 million on an adjusted basis.

Revenue for the Procedural Solutions segment increased 5 percent from the
prior year period to $910 million. Segment profit increased 38 percent to $143
million and increased 24 percent to $165 million on an adjusted basis.

Recent Highlights

Additional third quarter and recent highlights included:

  oExpanding its portfolio of clinically differentiated respiratory
    consumables by entering into an agreement to become the sole U.S.
    distributor of Smiths Medical bronchial hygiene products.
  oCompleting the acquisition of Angus Medical, a Calgary-based medical
    distributor of CareFusion's MaxPlus^® line of needle-free connectors.
  oSigning agreements with more than 15 hospitals and health systems for the
    Pyxis® ES platform, a combination of hardware and software that helps
    improve medication safety by simplifying and standardizing the medication
    management process.
  oIntroducing two new Snowden-Pencer® products to aid in minimally invasive
    surgeries – Take-apart laparoscopic scissors and the only pretzel-shaped
    laparoscopic retractor available in the North American market.
  oInvesting $112 million to repurchase 3.3 million shares during the quarter
    under its two-year, $500 million share repurchase program. From April 1
    through May 7, the company purchased an additional 3 million shares for
    approximately $104 million.
  oRaising $300 million for general corporate purposes by completing a
    private debt offering.

Fiscal 2013 Outlook

CareFusion now expects full-year fiscal 2013 constant currency revenue to be
flat to down low-single-digits on a percentage basis compared to fiscal 2012
revenue of $3.6 billion. The company previously expected revenue to grow 1 to
3 percent on a constant currency basis.The company reiterated its full-year
guidance range for adjusted diluted EPS from continuing operations of $2.11 to
$2.21.

The guidance is based on an assumed diluted weighted average outstanding share
count of approximately 224 million, which includes the impact of expected
share repurchases during fiscal 2013.

Conference Call

CareFusion will host a webcast and conference call today at 2 p.m. PDT (5 p.m.
EDT) to discuss the results for the third quarter fiscal 2013.

To access the call, visit theInvestors pageatwww.carefusion.com/. 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
(866) 730-5771 within the U.S. or (857) 350-1595 from outside the U.S. and
using the access code 42579710. A replay of the conference call will be
available from 4 p.m. PDT (7 p.m. EDT) on May 9 through 11:59 p.m. PDT on May
16 and can be accessed by dialing (888) 286-8010 in the U.S. or (617) 801-6888
from outside the U.S. and using the access code 55789066.

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 andpatient
identification systems,AVEA®,AirLife™ andLTV® series ventilation and
respiratory products,ChloraPrep® products,MedMined® services for data mining
surveillance,V. Mueller® surgical instruments, and an extensive line
ofproducts that support interventional medicine. CareFusion employs more than
15,000 people across its global operations. More information may be found
atwww.carefusion.com.

Use of Non-GAAP Financial Measures

This CareFusion news release and the information contained herein present
non-GAAP financial measures that exclude certain amounts, as follows:
"adjusted segment profit," which excludes amortization of acquired
intangibles, as well as nonrecurring items primarily related to the spinoff
and nonrecurring restructuring and acquisition integration charges; "adjusted
operating expenses," "adjusted operating income" and "adjusted operating
margin," which exclude the impact of the reserve for the expected government
settlement and amortization of acquired intangibles, as well as nonrecurring
items primarily related to the spinoff and nonrecurring restructuring and
acquisition integration charges; and "adjusted income from continuing
operations," "adjusted diluted earnings per share from continuing operations"
and "adjusted effective tax rate," which exclude the impact of the reserve for
the expected government settlement and amortization of acquired intangibles,
as well as nonrecurring items primarily related to the spinoff, nonrecurring
restructuring and acquisition integration charges and nonrecurring tax items.
The most directly comparable GAAP financial measures for these non-GAAP
financial measures are segment profit, operating expenses, operating income,
operating margin, income from continuing operations, diluted earnings per
share from continuing operations and effective tax rate. The company has
included below unaudited adjusted financial information for the quarters and
nine months ended March 31, 2013 and 2012, 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 nonrecurring 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.
CareFusion intends forward-looking terminology such as "believes," "expects,"
"may," "will," "should," "anticipates," "plans," or similar expressions to
identify forward-looking statements. Such statements are subject to certain
risks and uncertainties, which could cause the company's actual results to
differ materially from those projected, anticipated or implied by the
forward-looking statements. 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: 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 May 9, 2013.
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.



CAREFUSION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
                                          Quarter Ended     Nine Months Ended
                                          March 31,         March 31,
(in millions, except per share amounts)   2013    2012      2013       2012
Revenue                                 $ 901   $ 919     $ 2,647   $  2,637
Cost of Products Sold                     425     460       1,264      1,308
              Gross Margin                476     459       1,383      1,329
Selling, General and Administrative       244     241       737        766
Expenses
Research and Development Expenses         47      45        142        118
Restructuring and Acquisition             9       12        14         26
Integration Charges
Reserve for Expected Government           41      -         41         -
Settlement
              Operating Income            135     161       449        419
Interest Expense and Other, Net           17      21        55         63
Income Before Income Tax                  118     140       394        356
Provision for Income Tax                  34      36        115        86
Income from Continuing Operations         84      104       279        270
Loss from Discontinued Operations, Net    -       (72)      (3)        (73)
of Tax
Net Income                              $ 84    $ 32      $ 276     $  197
Per Share Amounts:^1
Basic Earnings (Loss) per Common Share:
    Continuing Operations               $ 0.38  $ 0.46    $ 1.25    $  1.20
    Discontinued Operations             $ -     $ (0.32)  $ (0.01)  $  (0.33)
    Basic Earnings per Common Share     $ 0.38  $ 0.14    $ 1.24    $  0.88
Diluted Earnings (Loss) per Common
Share:
    Continuing Operations               $ 0.37  $ 0.46    $ 1.24    $  1.19
    Discontinued Operations             $ -     $ (0.32)  $ (0.01)  $  (0.32)
    Diluted Earnings per Common Share   $ 0.37  $ 0.14    $ 1.23    $  0.87
Weighted-Average Number of Common
Shares Outstanding:
    Basic                                 222.5   224.6     222.4      224.4
    Diluted                               225.6   226.8     225.0      226.6
Adjusted Financial Measures:^2
    Operating Expenses                  $ 275   $ 267     $ 833     $  824
    Operating Income                    $ 201   $ 192     $ 550     $  505
    Operating Margin^3                    22.3%   20.9%     20.8%      19.2%
    Income from Continuing Operations   $ 134   $ 126     $ 354     $  330
    Diluted EPS from Continuing         $ 0.59  $ 0.56    $ 1.57    $  1.46
    Operations
    Effective Tax Rate                   27.1%   27.0%     28.9%      25.8%
____________

   Earnings per share calculations are performed separately for each component
^1 presented. Therefore, the sum of the per share components from the table
   may not equal the per share amounts presented.
   Adjusted financial measures are non-GAAP measures that exclude amortization
   of acquired intangibles, as well as certain nonrecurring items, as
   discussed above under Use of Non-GAAP Financial Measures. For the quarter
^2 and nine months ended March 31, 2013, adjusted financial measures also
   exclude amounts related to the reserve for the expected government
   settlement. These measures are reconciled to comparable GAAP measures in
   the Reconciliation of Non-GAAP Financial Measures included in the pages
   that follow.
   Operating margin reflects operating income divided by revenue. The
^3 Reconciliation of Non-GAAP Financial Measures included in the pages that
   follow present operating income on a GAAP and an adjusted basis, from which
   operating margin is derived.



CAREFUSION CORPORATION
SEGMENT AND SELECT BUSINESS LINE REVENUES
(UNAUDITED)
                         Quarter Ended           Nine Months Ended
                         March 31,      Percent   March 31,          Percent
(in millions)            2013     2012  Change    2013        2012   Change
Medical Systems^1
 Dispensing            $ 234   $  261   (10) %  $ 738     $   759    (3)  %
 Technologies
 Infusion Systems        246      245   -         678         690    (2)
 Respiratory             97       106   (8)       300         301    -
 Technologies
 Other                   7        7     -         21          19     11
    Total Medical      $ 584   $  619   (6)  %  $ 1,737   $   1,769  (2)  %
    Systems
Procedural Solutions^1,2
 Infection Prevention $ 150   $  150   -    %  $ 446     $   430    4    %
 Medical Specialties     88       80    10        254         237    7
 Specialty Disposables   79       70    13        210         201    4
    Total Procedural   $ 317   $  300   6    %  $ 910     $   868    5    %
    Solutions
 Total CareFusion      $ 901   $  919   (2)  %  $ 2,647   $   2,637  -    %
____________

   During the quarter ended September 30, 2012, we combined our respiratory
   diagnostics product line with our Respiratory Technologies business unit
^1 within our Medical Systems segment. Our respiratory diagnostics product
   line had previously been reported within our Procedural Solutions segment
   as "Other."
^2 Reflects the impact of businesses reclassified to discontinued operations.



CAREFUSION CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Adjusted
Financial
Data:
                 Segment Profit
(in millions,                                                               Income from    Diluted EPS
except per       Medical   Procedural   SG&A       Operating    Operating   Continuing     from
share amounts)   Systems   Solutions    Expenses   Expenses^6   Income      Operations^7   Continuing
                                                                                           Operations^8
Quarter Ended
March 31,
2013:
GAAP           $ 122     $ 54         $ 244      $ 341        $ 135       $ 84           $ 0.37
 Restructuring
 and             7         2            -          (9)          9           9              0.04
 Acquisition
 Integration^1
 Amortization
 of acquired     10        6            (16)       (16)         16          11             0.05
 intangibles^2
 Reserve for
 Expected        -         -            -          (41)         41          41             0.18
 Government
 Settlement^3
 Income Tax      -         -            -          -            -           (11)           (0.05)
 Items^4
Adjusted       $ 139     $ 62         $ 228      $ 275        $ 201       $ 134          $ 0.59
Nine Months
Ended March
31, 2013:
GAAP           $ 347     $ 143        $ 737      $ 934        $ 449       $ 279          $ 1.24
 Restructuring
 and             10        4            -          (14)         14          14             0.06
 Acquisition
 Integration^1
 Amortization
 of acquired     28        18           (46)       (46)         46          31             0.14
 intangibles^2
 Reserve for
 Expected        -         -            -          (41)         41          41             0.18
 Government
 Settlement^3
 Income Tax      -         -            -          -            -           (11)           (0.05)
 Items^4
Adjusted       $ 385     $ 165        $ 691      $ 833        $ 550       $ 354          $ 1.57
Quarter Ended
March 31,
2012:
GAAP           $ 118     $ 43         $ 241      $ 298        $ 161       $ 104          $ 0.46
 Restructuring
 and             7         5            -          (12)         12          12             0.05
 Acquisition
 Integration^1
 Amortization
 of acquired     13        6            (19)       (19)         19          13             0.06
 intangibles^2
 Income Tax      -         -            -          -            -           (3)            (0.01)
 Items^4
Adjusted       $ 138     $ 54         $ 222      $ 267        $ 192       $ 126          $ 0.56
Nine Months
Ended March
31, 2012:
GAAP           $ 315     $ 104        $ 766      $ 910        $ 419       $ 270          $ 1.19
 Restructuring
 and             15        11           -          (26)         26          26             0.11
 Acquisition
 Integration^1
 Amortization
 of acquired     39        17           (56)       (56)         56          38             0.17
 intangibles^2
 Spinoff^5       3         1            (4)        (4)          4           4              0.02
 Income Tax      -         -            -          -            -           (8)            (0.03)
 Items^4
Adjusted       $ 372     $ 133        $ 706      $ 824        $ 505       $ 330          $ 1.46
____________

   Restructuring and acquisition integration charges primarily relate to
^1 nonrecurring expenses associated with closing and consolidating facilities,
   as well as rationalizing headcount, and aligning operations.
   Amortization of acquired intangibles relate to the non-cash expenses
^2 associated with amortization of identifiable intangible assets of acquired
   businesses.
   Reserve for expected government settlement relates to the $41 million
   charge recorded in connection with the agreement in principle publicly
   disclosed on April 25, 2013, pursuant to which the company expects to
   resolve the previously disclosed government investigations related to prior
^3 sales and marketing practices for its ChloraPrep® skin preparation product
   and its relationships with healthcare professionals. The agreement in
   principle remains subject to several conditions, and the amount and timing
   of the payment are subject to the final terms of the settlement
   agreement. These amounts have not been allocated to segment results.
   Income tax items primarily relate to the tax impact of nonrecurring
   restructuring and acquisition integration and spinoff charges, as well as
^4 nonrecurring discrete benefits or charges associated with the spinoff. For
   the quarter and nine months ended March 31, 2013, income tax items also
   include the $8 million tax impact associated with the reserve for expected
   government settlement.
^5 Spinoff charges primarily relate to nonrecurring incremental expenses
   associated with our spinoff from Cardinal Health, Inc.
   Operating expenses consist of selling, general and administrative, research
^6 and development, restructuring and acquisition integration expenses, and
   the reserve for expected government settlement.
^7 Income from continuing operations is presented net of tax effect.
   Earnings per share calculations are performed separately for each component
^8 presented. Therefore, the sum of the per share components from the table
   may not equal the per share amounts presented.



CAREFUSION CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Adjusted Effective
Tax Rate:
                                   Nonrecurring   Amortization
(in millions)            GAAP      Items^1,2      of Acquired      Adjusted^3
                                                  Intangibles
Quarter Ended March
31, 2013:
    Income Before    $   118    $  50           $ 16             $ 184
    Income Tax
    Provision for    $   34     $  11           $ 5              $ 50
    Income Tax
    Effective Tax        28.6%     21.6%          34.2%            27.1%
    Rate^4
Nine Months Ended
March 31, 2013:
    Income Before    $   394    $  55           $ 46             $ 495
    Income Tax
    Provision for    $   115    $  11           $ 15             $ 141
    Income Tax
    Effective Tax        29.2%     21.3%          34.2%            28.9%
    Rate^4
Quarter Ended March
31, 2012:
    Income Before    $   140    $  12           $ 19             $ 171
    Income Tax
    Provision for    $   36     $  3            $ 6              $ 45
    Income Tax
    Effective Tax        26.1%     23.0%          33.3%            27.0%
    Rate^4
Nine Months Ended
March 31, 2012:
    Income Before    $   356    $  30           $ 56             $ 442
    Income Tax
    Provision for    $   86     $  8            $ 18             $ 112
    Income Tax
    Effective Tax        24.3%     24.9%          33.3%            25.8%
    Rate^4
Adjusted EPS Outlook for Fiscal Year Ended June
30, 2013:
GAAP Diluted Earnings per Common Share from                        $1.71 -
Continuing Operations                                              $1.81
    Estimated charges for nonrecurring items related to
    restructuring and acquisition integration, net of tax          $0.06
    (mid-point of an estimated range of $0.05 to $0.07 per
    diluted share)
    Estimated acquisition-related intangible amortization, net     $0.19
    of tax
    Reserve for expected
    government settlement, net of                                  $0.15
    tax^2
Adjusted Diluted Earnings per Common Share from                    $2.11 -
Continuing Operations                                              $2.21
____________

   Reflects nonrecurring charges primarily related to the spinoff,
   nonrecurring restructuring and acquisition integration charges, and
^1 nonrecurring income tax items. For the quarter and nine months ended March
   31, 2013, nonrecurring items also include amounts related to the reserve
   for the expected government settlement.
   Reserve for expected government settlement relates to the $41 million
   charge recorded in connection with the agreement in principle publicly
   disclosed on April 25, 2013, pursuant to which the company expects to
   resolve the previously disclosed government investigations related to prior
^2 sales and marketing practices for its ChloraPrep® skin preparation product
   and its relationships with healthcare professionals. The agreement in
   principle remains subject to several conditions, and the amount and timing
   of the payment are subject to the final terms of the settlement agreement.
   In addition, the estimated tax impact may change based on the final terms
   of the settlement.
   Adjusted financial information reflects GAAP results adjusted on a non-GAAP
^3 basis to exclude nonrecurring items and amortization of acquired
   intangibles noted above.
   Effective tax rate calculations are performed based on whole dollar
^4 amounts, and therefore may not equal the calculations based on amounts
   rounded in millions presented in the table above.



SOURCE CareFusion Corp.

Website: http://www.carefusion.com
Contact: Media, Kristen Cardillo, (858) 617-2317,
kristen.cardillo@carefusion.com; Investors, Jim Mazzola, (858) 617-1203,
jim.mazzola@carefusion.com
 
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