CareFusion Files Fiscal 2012 Form 10-K
SAN DIEGO, Jan. 31, 2013 /PRNewswire/ — CareFusion Corporation (NYSE: CFN) today announced that it has filed its annual report on Form 10-K for the fiscal year ended June 30, 2012. The company had delayed the filing to correct its accounting for sales-type leases in its Pyxis® medication and supply dispensing product lines.
The accounting correction resulted in immaterial revisions to CareFusion’s preliminary fourth quarter and full-year fiscal 2012 financial results, its financial statements for fiscal years ended June 30, 2010 and 2011, and selected financial data for the fiscal years ended June 30, 2008 through 2011. Although the effect of these revisions was not material to these financial statements, the cumulative impact would have been material in the fiscal year ended June 30, 2012, which is why the company made the revisions. These corrections are considered a restatement under generally accepted accounting principles.
“This accounting matter did not materially affect our financial results and, importantly, has no effect on the cash flows we receive under our lease arrangements,” said James F. Hinrichs, chief financial officer. “We are pleased to have this work completed and remain on track to become current in our Form 10-Q filings by our next deadline on Feb. 11.”
The company intends to report its first and second quarter fiscal 2013 results on Feb. 7.
Revised financial results
Revisions to the company’s preliminary fourth quarter and full-year fiscal 2012 results reflect both the impact of the accounting modification on sales-type leases and other accounting items recorded in the fourth quarter because it was considered an open accounting period until CareFusion filed its Form 10-K. This included a $7 million increase in recall reserves related to a previously disclosed product recall.
For the three months ended June 30, 2012, revenue was $961 million; operating income was $155 million, or $162 million on an adjusted basis excluding nonrecurring items; and adjusted operating income was 16.9 percent of revenue. Operating expenses during the quarter totaled $320 million, and adjusted operating expenses were $313 million. Income from continuing operations was $91 million, or $0.41 per diluted share. Adjusted income from continuing operations during the quarter was $98 million, or $0.44 per diluted share.
For the fiscal year ended June 30, 2012, revenue was $3.6 billion; operating income was $574 million, or $611 million on an adjusted basis excluding nonrecurring items; and adjusted operating income was 17 percent of revenue. Operating expenses during the year were $1.2 billion on both a reported and an adjusted basis. Income from continuing operations was $361 million, or $1.60 per diluted share. Adjusted income from continuing operations during the year was $390 million, or $1.72 per diluted share.
Conference call
CareFusion plans to release first and second quarter fiscal 2013 results on Thursday, Feb. 7, following the close of trading on the New York Stock Exchange.
The company will host a conference call on Feb. 7 at 2 p.m. PST (5 p.m. EST) to discuss the results for its first quarter fiscal 2013, ended on Sept. 30, 2012, and second quarter fiscal 2013, ended on Dec. 31, 2012. To access the call, visit the Investors page at www.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 (800) 706-7748 within the U.S. or (617) 614-3473 from outside the U.S., and use the access code 86859607. A replay of the conference call will be available from 4 p.m. PST (7 p.m. EST) on Feb. 7 through 8:59 p.m. PST on Feb. 14 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 52148625.
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(TM) and LTV® series ventilation and respiratory products, ChloraPrep® 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 at www.carefusion.com.
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 operating expenses,” “adjusted operating income,” and “adjusted segment profit,” which exclude nonrecurring items primarily related to the spinoff and nonrecurring restructuring and acquisition integration charges; and “adjusted income from continuing operations” and “adjusted diluted earnings per share from continuing operations,” and “adjusted effective tax rate,” which exclude 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 operating expenses, operating income, segment profit, 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 quarter ended June 30, 2012, and the fiscal years ended June 30, 2010, 2011 and 2012, including 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 information provides 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, including statements regarding the modified application of lease accounting principles to the company’s sales-type leases; and the timing for filing the company’s Form 10-Q for the quarter ended Sept. 30 and Form 10-Q for the quarter ended Dec. 31. 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 anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, the risk that additional information may arise during the course of the company’s lease accounting review that may require the company to make additional adjustments; the time and effort required to complete the company’s analysis and the review by the company’s independent auditors; and the time and effort required to prepare and file its periodic reports with the SEC, as well as other risks described more fully in Item 1A in the company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012, which are expressly incorporated herein by reference, and other factors as may periodically be described in the company’s filings with the SEC. The CareFusion news release and the information contained herein reflect management’s views as of Jan. 31, 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
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Quarter Ended Fiscal Year Ended
June 30, June 30,
-------- --------
2012 2012
---- ----
(in millions, except per share amounts) Preliminary(1) As Reported(2) Preliminary(1) As Reported(2)
------------- ------------- ------------- -------------
Revenue $968 $961 $3,601 $3,598
Cost of Products Sold 479 486 1,788 1,794
Gross Margin 489 475 1,813 1,804
Selling, General and Administrative Expenses 260 267 1,026 1,033
Research and Development Expenses 46 46 164 164
Restructuring and Acquisition Integration
Charges 7 7 33 33
Gain on the Sale of Assets - - - -
Operating
Income 176 155 590 574
Interest Expense and Other, Net 23 24 86 87
Income Before Income Tax 153 131 504 487
Provision for Income Tax 46 40 131 126
Income from Continuing Operations 107 91 373 361
Discontinued Operations:
Loss from the
Disposal of
Discontinued
Businesses,
Net of Tax (5) (4) (78) (78)
Income from
the
Operations
of
Discontinued
Businesses,
Net of Tax 8 9 8 10
Income (Loss) from Discontinued Operations,
Net of Tax 3 5 (70) (68)
Net Income $110 $96 $303 $293
==== === ==== ====
Per Share Amounts:(3)
Basic Earnings (Loss) per Common Share:
Continuing
Operations $0.48 $0.41 $1.67 $1.62
Discontinued
Operations $0.02 $0.02 $(0.32) $(0.31)
Basic
Earnings per
Common Share $0.50 $0.43 $1.35 $1.31
Diluted Earnings (Loss) per Common Share:
Continuing
Operations $0.48 $0.41 $1.65 $1.60
Discontinued
Operations $0.02 $0.02 $(0.31) $(0.30)
Diluted
Earnings per
Common Share $0.49 $0.43 $1.34 $1.30
Weighted-Average Number of Common Shares
Outstanding:
Basic 221.7 221.7 223.7 223.7
Diluted 224.2 224.2 226.0 226.0
Adjusted Financial Measures:4,5
Operating
Expenses $306 $313 $1,186 $1,193
Operating
Income $183 $162 $627 $611
Income from
Continuing
Operations $114 $98 $402 $390
Diluted EPS
from
Continuing
Operations $0.51 $0.44 $1.78 $1.72
Effective Tax
Rate 28.7% 28.4% 25.7% 25.6%
------------- ---- ---- ---- ----
(1) Preliminary financial
results provided on
August 9, 2012 and
included on our Form 8-K
filed on that same date.
(2) Financial results included
within the fiscal 2012
Form 10-K filed on
January 31, 2013.
(3) Earnings per share
calculations are
performed separately for
each component presented.
Therefore, the sum of the
per share components from
the table may not equal
the per share amounts
presented.
4 Adjusted financial measures
are non-GAAP measures
that exclude certain
nonrecurring items, as
discussed above under Use
of Non-GAAP Financial
Measures. These measures
are reconciled to
comparable GAAP measures
in the Reconciliation of
Non-GAAP Financial
Measures included on the
pages that follow.
5 Through June 30, 2012, the
Company included the
impact of acquisition
related intangible
amortization expense
within its Adjusted
Financial Measures. The
Adjusted Financial
Measures within this table
and the tables that follow
include the impact of
acquisition related
intangible asset
amortization expense,
which conforms to the
presentation under which
these periods were
originally reported.
CAREFUSION CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Fiscal Years Ended
June 30,
--------
2011 2010
---- ----
(in millions, except per share amounts) As Reported(1) As Restated(2) As Reported(1) As Restated(2)
------------- ------------- ------------- -------------
Revenue $3,432 $3,440 $3,376 $3,377
Cost of Products Sold 1,671 1,672 1,685 1,686
Gross Margin 1,761 1,768 1,691 1,691
Selling, General and Administrative Expenses 1,067 1,067 1,090 1,090
Research and Development Expenses 146 146 148 148
Restructuring and Acquisition Integration
Charges 64 64 15 15
Gain on the Sale of Assets (13) (13) (12) (12)
Operating
Income 497 504 450 450
Interest Expense and Other, Net 79 79 105 105
Income Before Income Tax 418 425 345 345
Provision for Income Tax 124 126 184 184
Income from Continuing Operations 294 299 161 161
Discontinued Operations:
Loss from the
Disposal of
Discontinued
Businesses,
Net of Tax (45) (45) (8) (8)
Income (Loss)
from the
Operations
of
Discontinued
Businesses,
Net of Tax (5) (5) 41 41
Income (Loss) from Discontinued Operations,
Net of Tax (50) (50) 33 33
Net Income $244 $249 $194 $194
==== ==== ==== ====
Per Share Amounts:(3)
Basic Earnings (Loss) per Common Share:
Continuing
Operations $1.32 $1.34 $0.73 $0.73
Discontinued
Operations $(0.23) $(0.23) $0.15 $0.15
Basic
Earnings per
Common Share $1.09 $1.11 $0.88 $0.88
Diluted Earnings (Loss) per Common Share:
Continuing
Operations $1.30 $1.32 $0.72 $0.72
Discontinued
Operations $(0.22) $(0.22) $0.15 $0.15
Diluted
Earnings per
Common Share $1.08 $1.10 $0.87 $0.87
Weighted-Average Number of Common Shares
Outstanding:
Basic 222.8 222.8 221.5 221.5
Diluted 225.1 225.1 223.0 223.0
Adjusted Financial Measures:4,5
Operating
Expenses $1,158 $1,158 $1,175 $1,175
Operating
Income $603 $610 $516 $516
Income from
Continuing
Operations $374 $379 $304 $304
Diluted EPS
from
Continuing
Operations $1.66 $1.68 $1.36 $1.36
Effective Tax
Rate 28.7% 28.7% 29.8% 29.8%
------------- ---- ---- ---- ----
____________
(1) Financial results as
previously reported in
filings with the SEC and
included in our Form 8-K
filed on August 9, 2012.
(2) Financial results included
within the fiscal 2012 Form
10-K filed on January 31,
2013.
(3) Earnings per share
calculations are performed
separately for each component
presented. Therefore, the sum
of the per share components
from the table may not equal
the per share amounts
presented.
4 Adjusted financial measures
are non-GAAP measures that
exclude certain nonrecurring
items, as discussed above
under Use of Non-GAAP
Financial Measures. These
measures are reconciled to
comparable GAAP measures in
the Reconciliation of Non-
GAAP Financial Measures
included on the pages that
follow.
5 Through June 30, 2012, the
Company included the impact
of acquisition related
intangible amortization
expense within its Adjusted
Financial Measures. The
Adjusted Financial Measures
within this table and the
tables that follow include
the impact of acquisition
related intangible asset
amortization expense, which
conforms to the presentation
under which these periods
were originally reported.
CAREFUSION CORPORATION
SEGMENT AND SELECT BUSINESS LINE REVENUES
(UNAUDITED)
Quarter Ended Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
June 30, June 30, June 30, June 30,
-------- -------- -------- --------
2012 2012 2011 2010
---- ---- ---- ----
(in millions) Preliminary(1) As Reported(2) Preliminary(1) As Reported(2) As Reported(3) As Restated(2) As Reported(3) As Restated(2)
------------ ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
Medical Systems
Dispensing
Technologies $285 $278 $1,041 $1,038 $902 $910 $867 $868
Infusion Systems 266 266 955 955 889 889 840 840
Respiratory
Technologies 88 88 295 295 267 267 338 338
Other 7 7 26 26 24 24 25 25
Total Medical Systems $646 $639 $2,317 $2,314 $2,082 $2,090 $2,070 $2,071
Procedural Solutions4
Infection
Prevention $145 $145 $576 $576 $568 $568 $463 $463
Medical
Specialties 80 80 317 317 322 322 310 310
Specialty
Disposables 65 65 266 266 304 304 300 300
Other 32 32 125 125 156 156 233 233
Total Procedural Solutions $322 $322 $1,284 $1,284 $1,350 $1,350 $1,306 $1,306
Total CareFusion $968 $961 $3,601 $3,598 $3,432 $3,440 $3,376 $3,377
____________
(1) Preliminary financial results provided on August 9,
2012 and included in our Form 8-K filed on that
same date.
(2) Financial results included within the fiscal 2012
Form 10-K filed on January 31, 2013.
(3) Financial results as previously reported in filings
with the SEC and included in our Form 8-K filed on
August 9, 2012.
4 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, except per share amounts) Medical Systems Procedural Solutions SG&AExpenses OperatingExpenses7 OperatingIncome IncomefromContinuing Diluted
Operations EPS from
Continuing
Operations8
-----------
Quarter Ended June 30, 2012
GAAP, As Reported(1) $127 $28 $267 $320 $155 $91 $0.41
Restructuring and Acquisition Integration(2) 3 4 - (7) 7 7 0.03
Adjusted $130 $32 $267 $313 $162 $98 $0.44
Fiscal Year Ended June 30, 2012
GAAP, As Reported(1) $465 $109 $1,033 $1,230 $574 $361 $1.60
Restructuring and Acquisition Integration(2) 18 15 - (33) 33 33 0.16
Spinoff(3) 3 1 (4) (4) 4 4 0.02
Income Tax Items4 - - - - - (8) (0.04)
Adjusted $486 $125 $1,029 $1,193 $611 $390 $1.72
Fiscal Year Ended June 30, 2011
GAAP, As Restated(1) $382 $109 $1,067 $1,277 $504 $299 $1.32
Restructuring and Acquisition Integration(2) 34 30 - (64) 64 64 0.29
Spinoff(3) 31 24 (55) (55) 55 55 0.25
Income Tax Items4 - - - - - (26) (0.12)
Gain on the Sale of Assets5 - - - - (13) (13) (0.06)
Adjusted $447 $163 $1012 $1,158 $610 $379 $1.68
Fiscal Year Ended June 30, 2010
GAAP, As Restated(1) $348 $90 $1,090 $1,253 $450 $161 $0.72
Restructuring and Acquisition Integration(2) 5 10 - (15) 15 15 0.07
Spinoff(3) 35 28 (63) (63) 63 63 0.28
Income Tax Items4 - - - - - 55 0.25
Interest Expense and Other, Net - - - - - 22 0.10
Gain on the Sale of Assets6 - - - - (12) (12) (0.05)
Adjusted $388 $128 $1,027 $1,175 $516 $304 $1.36
____________
(1) Financial results included within the
fiscal 2012 Form 10-K filed on January 31,
2013.
(2) Restructuring and acquisition integration
charges primarily relate to 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.
4 Income tax items primarily relate to the tax
impact of nonrecurring restructuring and
acquisition integration and spinoff
charges, as well as nonrecurring discrete
benefits or charges associated with the
spinoff.
5 The $13 million net gain on the sale of
assets relates primarily to the sale of
our OnSite Services business ($15 million
gain), offset by a post closing adjustment
related to the sale of our Research
Services business ($2 million loss).
6 The $12 million net gain on the sale of
assets relates primarily to the sale of
our Research Services business.
7 Operating expenses consist of selling,
general and administrative, research and
development, and restructuring and
acquisition integration expenses.
8 Earnings per share calculations are
performed separately for each component
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:
(in millions) GAAP Nonrecurring Adjusted(3)
As Reported(1) Items(2)
--- ------------- -------
Quarter Ended June
30, 2012
Income Before Income Tax $131 $7 $138
Provision for Income Tax $40 $ - $40
Effective Tax Rate4 30.0% 2.2% 28.4%
Fiscal Year Ended
June 30, 2012
Income Before Income Tax $487 $37 $524
Provision for Income Tax $126 $8 $134
Effective Tax Rate4 25.9% 22.0% 25.6%
GAAP Nonrecurring Adjusted(3)
As Restated(1) Items(2)
------------- -------
Fiscal Year Ended
June 30, 2011
Income Before Income Tax $425 $106 $531
Provision for Income Tax $126 $26 $152
Effective Tax Rate4 29.9% 24.3% 28.7%
Fiscal Year Ended
June 30, 2010
Income Before Income Tax $345 $88 $433
Provision for Income Tax $184 $(55) $129
Effective Tax Rate4 53.3% (63.1)% 29.8%
____________
(1) Financial results
included within the
fiscal 2012 Form 10-K
filed on January 31,
2013.
(2) Reflects nonrecurring
charges primarily
related to the
spinoff, nonrecurring
restructuring and
acquisition
integration charges,
and nonrecurring
income tax items.
(3) Adjusted financial
information reflects
GAAP results adjusted
on a non-GAAP basis
to exclude
nonrecurring items
noted.
4 Effective Tax Rate
calculations are
performed based on
whole dollar amounts,
and therefore may not
equal the
calculations based on
amounts rounded in
millions presented in
the table above.
SOURCE CareFusion Corporation
