SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
APRIL 22, 1996
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
CARDINAL HEALTH, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
OHIO 0-12591 31-0958666
(STATE OR OTHER (COMMISSION (IRS EMPLOYER
JURISDICTION OF FILE NUMBER) IDENTIFICATION NO.)
INCORPORATION)
5555 GLENDON COURT, DUBLIN, OHIO 43016
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(614) 717-5000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)<PAGE>
ITEM 5. OTHER EVENTS
On April 22, 1996, Cardinal Health, Inc., an Ohio
corporation ("Cardinal"), announced its financial results for
its third fiscal quarter ended March 31, 1996. A copy of
Cardinal's press release dated April 22, 1996 announcing the
financial results is filed as Exhibit 99.1 hereto and is
incorporated herein by this reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMA-
TION AND EXHIBITS
(c) Exhibits.
The following exhibits are filed with this report:
99.1 Cardinal Press Release dated April 22, 1996.<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto
duly authorized.
CARDINAL HEALTH, INC.
Dated: April 23, 1996 By /s/ George H. Bennett, Jr.
George H. Bennett, Jr.
Executive Vice President,
General Counsel and
Secretary<PAGE>
EXHIBIT INDEX
99.1 Cardinal Press Release dated April 22, 1996.
Exhibit 99.1
[LETTERHEAD OF CARDINAL HEALTH, INC.]
NEWS RELEASE
FOR IMMEDIATE RELEASE
MONDAY, APRIL 22, 1996
For Additional Information, Contact:
Debra Dendahl Hadley
Director, Investor Relations
(614) 717-7481
THIRD QUARTER EARNINGS IMPROVE 23% AT CARDINAL HEALTH
DUBLIN, OHIO, APRIL 22,1996 -- Cardinal Health, Inc.
(NYSE: CAH) today reported record earnings for the third
quarter of its fiscal year 1996. The company's net earnings of
$36.8 million for the quarter ended March 31, 1996 were 23%
higher than the $30.0 million recorded in the third quarter of
1995. Fully diluted earnings per share were $.75 in the most
recent quarter, an increase of 23% from $.61 earned in the
third quarter last year. For the first nine months of fiscal
1996, Cardinal earned $90.8 million, or $1.85 per share, versus
$74.6 million, or $1.54 per share in the comparable period last
year. Results for prior periods have been restated to reflect
the November 1995 acquisition of Medicine Shoppe International,
Inc. which was accounted for on a pooling of interests basis.
Current year results expressed in the text of this release
exclude the effect of a one-time charge of $11.8 million, net
of tax, related to that merger recorded in the second quarter
of fiscal 1996.
The earnings improvement was driven by the combination of
rising revenues and a stable gross margin, complemented by
improved expense control. Revenues in the third quarter of
fiscal 1996 rose 10% from the prior year to $2.2 billion. The
company's gross margin was 6.85% in the most recent quarter
compared with 6.90% in the prior year. Expenses increased only
3%, resulting in an expense to revenue ratio of 3.82% in the
third quarter of 1996, down from 4.08% in the same period last
year. Not included in revenues were $1.6 billion of brokerage
shipments to retail drug chain warehouses, a 31% increase
compared with the first nine months of fiscal 1995.
Return on revenues continued to improve in the third
quarter and first nine months of 1996. Earnings before income
taxes rose to 2.81% of revenues in the most recent quarter, up
from 2.55% in the year-ago period. For the first nine months
of 1996, the ratio of earnings before income taxes to revenues
was 2.40% versus 2.17% for the same period in 1995. Return on
average shareholders' equity in the third quarter of fiscal
1996 rose to 21.3%, up from 20.5% in the comparable prior year
quarter.
-- more --<PAGE>
"We are very pleased with our continued progress in
driving profitability and return on investment levels higher,"
commented Robert D. Walter, chairman and chief executive
officer of Cardinal Health, Inc. "We have made excellent
progress in controlling expense growth, with the majority of
the improvement coming from greater efficiencies in
distribution. As a result, operating earnings per employee
increased 8% from the year ago measurement."
The company continues to make significant investments in
information systems development and distribution operations.
Year-to-date, Cardinal's capital expenditures total $50
million, a 126% increase from the same period last year. At
quarter-end, the number of customers using CardinalCHOICE
Trademark systems increased to 4,820 up 36% from the same time
last year. During the quarter, an advanced warehouse
automation system came fully on-line at the company's largest
facility, located in Boston. Numerous other initiatives
related to the automation or consolidation of facilities are
currently underway.
Cardinal's balance sheet at quarter-end was very sound.
The company had a net debt to total capital ratio of 24.7% at
March 31, 1996, down from 30.9% one year before. Shareholders'
equity to total assets at the end of the third quarter of
fiscal 1996 measured 32.0%, and total capital to total assets
on that date was 48.3%.
Medicine Shoppe International, Inc., Cardinal's wholly-
owned apothecary style retail pharmacy franchisor, continues
to meet expectations. Medicine Shoppe, which is currently
celebrating its 25th anniversary, added a total of 23 new
stores (16 domestic and 7 foreign) to its operations during
the third quarter. In addition, the first Medicine Shoppe
Registered Pharmacy in Indonesia opened earlier this month.
Cardinal Health, which was already the designated provider
to Medicine Shoppe Pharmacies in nine states, recently became
the designated provider in an additional six states. As a
result, the company's volume of business with Medicine Shoppe
has expanded to approximately $350 million annually.
On February 7, 1996, Cardinal Health and Pyxis Corporation
announced the signing of a definitive agreement with respect to
a merger in which Pyxis will become a wholly-owned subsidiary
of Cardinal. On April 26, 1996, special meetings of the
shareholders of both companies will be held to vote on this
transaction. Cardinal currently expects to complete this
transaction within ten business days from the date of the
special shareholders' meetings.
Cardinal Health, Inc., based in Dublin, Ohio, is one of
the country's largest heath care service providers. The
company provides an array of value-added pharmaceutical
distribution services to a broad base of customers nationwide
including hospitals, independent and chain pharmacies, managed
care facilities, alternate care centers, and the pharmacy
departments of supermarkets and mass merchandisers. The
company is also a franchisor of apothecary-style pharmacies
through its wholly-owned subsidiary, Medicine Shoppe
International, Inc.
-- more --<PAGE>
[LOGO OF CARDINAL HEALTH, INC.]
CARDINAL HEALTH, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THIRD QUARTER (UNAUDITED)
------------------------------------------------------------
March 31, % of March 31, % of
1996 Net Revenues 1995 Net Revenues % Change
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Revenues $ 2,202,804 100.00% $2,001,250 100.00% 10%
Cost of Products Sold 2,051,878 93.15% 1,863,258 93.10% 10%
---------- --------
Gross Margin 150,926 6.85% 137,992 6.90% 9%
S, G & A Expenses 84,117 3.82% 81,660 4.08% 3%
---------- --------
Operating Earnings 66,809 3.03% 56,332 2.82% 19%
Other Income (Expense);
Interest Expense (6,037) 0.27% (6,443) 0.32% (6)%
Other, net 1,072 0.05% 1,041 0.05% 3%
---------- --------
Earnings Before Income
Taxes 61,844 2.81% 50,930 2.55% 21%
Provision for Income
Taxes 25,047 1.14% 20,944 1.05% 20%
---------- --------
Net Earnings $ 36,797 1.67% $ 29,986 1.50% 23%
========== ========
Earnings Per Common Share:
Primary $ 0.75 $ 0.61 23%
Fully Diluted $ 0.75 $ 0.61 23%
Weighted Average Number
of Shares Outstanding:
Primary 49,157 49,170
Fully Diluted 49,224 49,178
</TABLE>
-- more --<PAGE>
[LOGO OF CARDINAL HEALTH, INC.]
CARDINAL HEALTH, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
YEAR-TO-DATE (unaudited)
-------------------------------------------------------------
March 31, % of March 31, % of
1996 Net Revenues 1995 Net Revenues % Change
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Revenues $6,381,569 100.00% $5,832,645 100.00% 9%
Cost of Products Sold 5,964,137 93.46% 5,456,944 93.56% 9%
--------- ---------
Gross Margin 417,432 6.54% 375,701 6.44% 11%
S, G & A Expenses 254,459 3.99% 237,842 4.08% 7%
Merger Expenses (16,374)
--------- ---------
Operating Earnings 146,599 2.30% 137,859 2.36% 6%
Other Income (Expense):
Interest Expense (14,278) 0.22% (14,689) 0.25% (3)%
Other, net 4,614 0.07% 3,654 0.06% 26%
--------- ---------
Earnings Before Income
Taxes 136,935 2.15% 126,824 2.17% 8%
Provision for Income
Taxes 57,932 0.91% 52,186 0.89% 11%
--------- ---------
Net Earnings $ 79,003 1.24% $ 74,638 1.28% 6%
========= =========
Earnings Per Common
Share:
Primary $ 1.61 $ 1.54 5%
Fully Diluted $ 1.61 $ 1.54 5%
/------------------------------------------------------------------------------------/
/Pro Forma Earnings /
/ Before Income /
/ Taxes(a) $ 153,309 2.40% $ 126,824 2.17% 21% /
/ /
/Pro Forma Earnings(a) $ 90,803 1.42% $ 74,638 1.28% 22% /
/ /
/Pro Forma Earnings /
/ Per Common Share(a) /
/ Primary $ 1.85 $ 1.54 20% /
/ Fully Diluted $ 1.85 $ 1.54 20% /
/------------------------------------------------------------------------------------/
Weighted Average Number
of Shares Outstanding:
Primary 49,060 48,478
Fully Diluted 49,100 48,522
<FN>
(a) Pro forma earnings before income taxes, earnings and earnings per
Common Share exclude the effect of Medicine Shoppe Merger costs
of approximately $16,374,000 ($11,800,000, net of tax) recorded
during the three months ended December 31, 1995.
</TABLE>
-- more --<PAGE>
[LOGO OF CARDINAL HEALTH, INC.]
CARDINAL HEALTH, INC.
CONSOLIDATED BALANCE SHEETS
($000's)
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, June 30, March 31,
1996 1995 1995
------------ ------------ ------------
ASSETS
------
CURRENT ASSETS
<S> <C> <C> <C>
Cash and Equivalents and
Marketable Securities $ 129,480 $ 83,220 $ 61,488
Trade Receivables 560,495 529,672 535,840
Merchandise Inventories 1,232,641 1,071,811 1,086,235
Prepaid Expenses and Other 30,855 25,472 30,084
--------- --------- ---------
Total Current Assets 1,953,471 1,710,175 1,713,647
Property and Equipment - at Cost 228,727 183,287 163,280
Less: Accumulated Depreciation
and Amortization (98,477) (86,205) (83,225)
--------- --------- ---------
Property and Equipment - Net 130,250 97,082 80,055
Finance Notes and Accrued Interest
Receivable 29,019 27,278 27,553
Intangibles and Other 87,809 85,141 83,383
--------- --------- ---------
TOTAL ASSETS $2,200,549 $1,919,676 $1,904,638
========= ========= =========
LIABILITIES AND SHAREHOLDERS'
EQUITY
-----------------------------
CURRENT LIABILITIES
Notes Payable - Banks $ - $ 3,000 $ 117,000
Current Portion of Long-Term
Obligations 101,963 2,083 2,160
Accounts Payable 1,001,205 952,206 867,207
Other Accrued Liabilities 118,691 116,789 106,425
--------- --------- ---------
Total Current Liabilities 1,221,859 1,074,078 1,092,792
Long-Term Obligations, Less
Current Portion 257,943 209,202 210,161
Deferred Taxes and Other
Liabilities 17,422 12,710 2,948
Common Shares - Without Par Value 368,184 360,468 357,905
Retained Earnings 343,203 270,363 247,894
Common Shares in Treasury - At Cost (4,889) (4,011) (3,790)
Unamortized Value of Restricted
Stock Awards (3,173) (3,134) (3,272)
--------- --------- ---------
Total Shareholders' Equity 703,325 623,686 598,737
--------- --------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $2,200,549 $1,919,676 $1,904,638
========= ========= =========
<CAPTION>
March/June March/March
Difference Difference
---------- -----------
ASSETS
------
CURRENT ASSETS
<S> <C> <C>
Cash and Equivalents and
Marketable Securities $ 46,260 $ 67,992
Trade Receivables 30,823 24,655
Merchandise Inventories 160,830 146,406
Prepaid Expenses and Other 5,383 771
-------- ---------
Total Current Assets 243,296 239,824
Property and Equipment - at Cost 45,440 65,447
Less: Accumulated Depreciation
and Amortization (12,272) (15,252)
-------- ---------
Property and Equipment - Net 33,168 50,195
Finance Notes and Accrued Interest
Receivable 1,741 1,466
Intangibles and Other 2,668 4,426
-------- ---------
TOTAL ASSETS $280,873 $ 295,911
======== =========
LIABILITIES AND SHAREHOLDERS'
EQUITY
-----------------------------
CURRENT LIABILITIES
Notes Payable - Banks $ (3,000) $(117,000)
Current Portion of Long-Term
Obligations 99,880 99,803
Accounts Payable 48,999 133,998
Other Accrued Liabilities 1,902 12,266
------- --------
Total Current Liabilities 147,781 129,067
Long-Term Obligations, Less
Current Portion 48,741 47,782
Deferred Taxes and Other
Liabilities 4,712 14,474
Common Shares - Without Par Value 7,716 10,279
Retained Earnings 72,840 95,309
Common Shares in Treasury - At Cost (878) (1,099)
Unamortized Value of Restricted
Stock Awards (39) 99
------- --------
Total Shareholders' Equity 79,639 104,588
------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $280,873 $295,911
======= =======
</TABLE>
###
