Attached files
| file | filename |
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| 8-K - FORM 8-K - CAREFUSION Corp | d8k.htm |
| EX-99.3 - INFORMATION DISCLOSED BY CAREFUSION CORPORATION - CAREFUSION Corp | dex993.htm |
| EX-99.1 - NEWS RELEASE - CAREFUSION Corp | dex991.htm |
 Q4 and Fiscal
2010 Investor/Analyst Call
August 10, 2010
Exhibit 99.2
©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
|
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
2
Forward-Looking Statements and GAAP
Reconciliation
contains 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: 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; and 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. This presentation
reflects management’s views as of August 10, 2010. Except to the extent required
by applicable law, we undertake no obligation to update or revise any forward-looking
statement.
financial measures. Reconciliations can be found on slides 16 and 17 of this
presentation. In addition, definitions Relations tab.
“Safe
Harbor”
Statement
under
the
Private
Securities
Litigation
Reform
Act
of
1995:
This
presentation
Non-GAAP
Financial
Measures:
The
financial
information
included
in
this
presentation
includes
Non-GAAP
and
reconciling
information
can
be
found
on
CareFusion’s
website
at
www.carefusion.com
under
the
Investor |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
3
Today’s Speakers
•
Dave Schlotterbeck, Chairman and Chief Executive
Officer
•
Ed Borkowski, Chief Financial Officer |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
Q4 and Fiscal 2010
Results |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
5
Q4 Fiscal 2010 Year-Over-Year
Quarterly Review
GAAP
Adjusted
$M
%
Change
¹
$M
%
Change
¹
Revenue
$1,035
19%
$1,035
19%
Operating
Expenses
²
$362
14%
$338
13%
Operating
Income
²
$135
59%
$147
44%
Income From Continuing
Operations
³
$52
(20)%
$85
10%
Diluted EPS From Continuing
Operations
³
$0.23
(23)%
$0.38
6%
1
% Change over prior year period.
2
Adjusted operating expenses and adjusted operating income are Non-GAAP
financial measures that exclude nonrecurring items related to restructuring
and acquisition integration charges, nonrecurring spinoff related costs and nonrecurring gain on the sale of assets.
3
Adjusted income from continuing operations and adjusted diluted earnings per share
are Non-GAAP financial measures that exclude nonrecurring items related
to restructuring and acquisition integration charges, nonrecurring spinoff related costs, nonrecurring gain on the sale of assets and
nonrecurring tax items. |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
6
Q4 Fiscal 2010 Year-Over-Year
Quarterly Segment Review
GAAP
Adjusted
Critical Care Technologies (CCT)
$M
%
Change
¹
$M
%
Change
¹
Revenues
$716
21%
$716
21%
Segment
Profit
²
$106
38%
$123
38%
Medical Technologies and Services
(MTS)
$M
%
Change
¹
$M
%
Change
¹
Revenues
$319
16%
$319
16%
Segment
Profit
²
$17
113%
$24
85%
1
% Change over prior year period.
2
Adjusted segment profit is a Non-GAAP financial measure that excludes
nonrecurring items related to restructuring and acquisition integration
charges and nonrecurring spinoff related costs. |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
7
Fiscal 2010 Review
GAAP
Adjusted
$M
%
Change
¹
$M
%
Change
¹
Revenue
$3,929
9%
$3,929
9%
Operating
Expenses
²
$1,406
9%
$1,324
9%
Operating
Income
²
$472
6%
$542
5%
Income From Continuing
Operations
³
$171
(41)%
$317
0%
Diluted EPS From Continuing
Operations
³
$0.77
(42)%
$1.42
(1)%
% Change over prior year period.
Adjusted operating expenses and adjusted operating income are Non-GAAP financial measures that
exclude nonrecurring items related to restructuring and acquisition integration charges,
nonrecurring spinoff related costs and nonrecurring gain on the sale of assets. Adjusted income
from continuing operations and adjusted diluted earnings per share are Non-GAAP financial measures that exclude nonrecurring
items related to restructuring and acquisition integration charges, nonrecurring spinoff related
costs, non recurring gain on the sale of assets and nonrecurring tax items. Adjusted
amounts also exclude the impact of the $58 million charge related to the tax reserve increase taken in Q3 fiscal 2010.
1
2
3 |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
8
Fiscal 2010 Segment Review
GAAP
Adjusted
Critical Care Technologies (CCT)
$M
%
Change
¹
$M
%
Change
¹
Revenues
$2,644
9%
$2,644
9%
Segment
Profit
²
$395
12%
$450
12%
Medical Technologies and Services
(MTS)
$M
%
Change
¹
$M
%
Change
¹
Revenues
$1,285
10%
$1,285
10%
Segment
Profit
²
$65
(28)%
$92
(19)%
1
% Change over prior year period.
2
Adjusted segment profit is a Non-GAAP financial measure that excludes
nonrecurring items related to restructuring and acquisition integration
charges and nonrecurring spinoff related costs. |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
Fiscal 2011 Guidance |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
Impact of FY10 Benefits Not Expected
To Reoccur in FY11; FX Fluctuations
Positive
impact
on
Infusion
revenue
related
to
the
resumption
of
sales
of
Alaris
®
System
in
July
2009
following
5 months on ship hold
$60 million
Respiratory revenue
for flu and emergency preparedness
related to H1N1
$60 -
$65 million
Negative currency
impact
anticipated from fiscal 2010
results to fiscal 2011 budget
$85 -
$90 million
Total Revenue Impact
~$210 million
Estimated Aggregate EPS Impact
¹
$0.25 -
$0.30
10
Estimated aggregate EPS impact is based on the reduction of the revenue associated with each
one-time benefit, as well as the associated cost of sales, operating expenses and income
tax expense at our fiscal year 2010 effective tax rate. Weighted average diluted common shares
outstanding of 223.0 million for fiscal year 2010 were utilized in determining the final estimated EPS
impact. 1 |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
Fiscal 2011 Guidance
$ in millions
FY11 Outlook
Total Revenue (percent growth over FY10)
Mid single digits on a reported basis;
mid to high single digits on a constant
currency basis
Adjusted Operating Expenses
33% of total revenue
Gross Margin
~48%
Adjusted Operating Margin
~15%
Adjusted Effective Tax Rate
30 -
32%
Adjusted Diluted EPS
$1.58 -
$1.68
Nonrecurring Items
$100 -
$110
Diluted Weighted Average Shares Outstanding
~225M
Capital Expenditures
$160 -
$180
11
Adjusted operating expenses and adjusted operating margin are Non-GAAP financial measures that
exclude nonrecurring items related to restructuring and acquisition integration charges and
nonrecurring spinoff related costs. Adjusted effective tax rate and adjusted diluted earnings
per share are Non-GAAP financial measures that exclude nonrecurring items related to
restructuring and acquisition integration charges, nonrecurring spinoff related costs, nonrecurring
tax items and discontinued operations. Nonrecurring items are related to restructuring and
acquisition integration charges, nonrecurring spinoff related costs and nonrecurring tax items.
1
2
3
2
3
1
2
1 |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
12
Fiscal 2011 Assumptions
•
Hospital capital spending grows low to mid single
digits; customers continue prioritizing spending
•
Restructuring provides an additional $85 million
to $95 million in pre-tax cost savings
•
Foreign exchange rates remain at current levels
•
Negative EPS
currency impact between fiscal
2010 results and fiscal 2011 budget is ~$0.08 |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
13
Fiscal 2011 CCT Segment-related
Assumptions vs. Fiscal 2010 Results
•
Segment revenue grows on a percentage
basis by mid single digits on a reported
and constant currency basis
°
Infusion:
Revenues grow on a percentage basis in
the high teens
due
to
Medegen
acquisition
and
from
incremental market share gains in 2HFY11 following
FDA
requirement
for
Baxter
to
remove
its
Colleague
pump base within two years
°
Respiratory:
Revenues are flat due to a normal flu
season with no impact from H1N1
°
Dispensing:
Revenues grow on a percentage basis by
low to mid single digits |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
14
Fiscal 2011 MTS Segment-related
Assumptions vs. Fiscal 2010 Results
•
Segment revenue grows on a percentage basis by
low single digits on a reported basis and mid
single digits on constant currency basis
°
ChloraPrep
®
business grows double digits based on
successful execution of growth strategy both domestically
and internationally
°
Interventional Specialties business continues to grow,
driven
by
full
commercial
launch
of
AVAmax
®
Vertebral
Balloon (Kyphoplasty) and other portfolio products
°
Research Services divestiture negatively impacts top line
by 5 percent |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
Q&A |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
16
Q4 Fiscal 2010 Non-GAAP
Reconciliations
$ in millions
FY10 Q4
GAAP
Nonrecurring
Items
¹
FY10 Q4
Adjusted
Operating Expenses
$362
$(24)
$338
Operating Income
$135
$12
$147
Income From Continuing Operations
$52
$33
$85
Diluted EPS From Continuing
Operations
²
$0.23
$0.15
$0.38
Critical Care Technologies
Segment Profit
$106
$17
$123
Medical Technologies and
Services Segment Profit
$17
$7
$24
Nonrecurring items are related to restructuring and acquisition integration charges, nonrecurring
spinoff related costs, nonrecurring gain on the sale of assets and nonrecurring tax items.
Earnings per share calculations are performed for each column presented. Therefore, the sum of
the per share adjustments from the table above may not equal the adjusted per share total
presented. the reasons why management believes that the presentation of non-GAAP financial measures provides
useful information to investors regarding the company’s financial condition and results of
operations is included in Exhibit 99.3 of Form 8-K filed by the company on August 10, 2010.
2
1
Note:
A
full
GAAP
to
non-GAAP
reconciliation
can
be
found
on
CareFusion’s
website
at
www.carefusion.com
under
the
Investor
Relations
tab.
A
discussion
of |
 ©
2010 CareFusion Corporation or one of its subsidiaries. All rights reserved.
17
Fiscal 2010 Non-GAAP
Reconciliations
$ in millions
FY10
GAAP
Nonrecurring
Items
¹
FY10
Adjusted
Operating Expenses
$1,406
$(82)
$1,324
Operating Income
$472
$70
$542
Income From Continuing Operations
$171
$146
$317
Diluted EPS From Continuing
Operations
²
$0.77
$0.65
$1.42
Critical Care Technologies
Segment Profit
$395
$55
$450
Medical Technologies and
Services Segment Profit
$65
$27
$92
Nonrecurring items are related to restructuring and acquisition integration charges, nonrecurring
spinoff related costs, nonrecurring gain on the sale of assets and
nonrecurring tax items. Adjusted amounts also exclude the impact of the $58 million charge related to the tax reserve increase taken in Q3 fiscal 2010.
Earnings per share calculations are performed for each column presented. Therefore, the sum of the per
share adjustments from the table above may not equal the adjusted per share total
presented. the reasons why management believes that the presentation of non-GAAP financial measures provides
useful information to investors regarding the company’s financial condition and results of
operations is included in Exhibit 99.3 of Form 8-K filed by the company on August 10, 2010.
1
2
Note:
A
full
GAAP
to
non-GAAP
reconciliation
can
be
found
on
CareFusion’s
website
at
www.carefusion.com
under
the
Investor
Relations
tab.
A
discussion
of |