Attached files
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| EX-99.1 - EX-99.1 - CAREFUSION Corp | d630117dex991.htm |
| 8-K - 8-K - CAREFUSION Corp | d630117d8k.htm |
 Acquisition of
Vital Signs Kieran Gallahue, Chairman & CEO
Jim Hinrichs, CFO
November 18, 2013
Exhibit 99.2
©
2013 CareFusion Corporation or one of its subsidiaries. All rights reserved.
|
 Forward-Looking
Statements and Use of Non-GAAP Financial Measures
2
©
2013 CareFusion Corporation or one of its subsidiaries. All rights reserved.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:
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. Forward looking statements include, but are not limited to, statements about
the timing of the anticipated acquisition of the Vital Signs division of GE Healthcare, the
financing of the anticipated acquisition, the potential benefits and synergies of the anticipated
acquisition, including the expected impact on future financial and operating results, and post
acquisition plans and intentions. This presentation also includes forward-looking
statements regarding our financial guidance. The forward-looking statements contained herein are based on the
current expectations and assumptions of CareFusion and not on historical facts. The following
important factors, among others, could cause actual results to differ materially from those set
forth in the forward-looking statements: the satisfaction of conditions to closing the agreement to
acquire Vital Signs; the risk that the businesses will not be integrated successfully; and the risk
that benefits and synergies from the acquisition may not be fully realized or may take longer
to realize than expected. Additional factors that may affect future results are described in
CareFusion's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 and Annual
Report on Form 10-K for the year ended June 30, 2013. This presentation reflects
management’s views as of November 18, 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. Non-GAAP Financial
Measures: management uses 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. Reconciliations can be
found on slide 8 of this presentation. Additional information regarding the Company’s use of
non-GAAP financial measures is posted on CareFusion’s website at www.carefusion.com
under the Investors tab.
This presentation contains forward-looking statements
The
financial
information
included
in
this
presentation
includes
non-GAAP
financial
measures.
The
Company’s |
 Transaction
highlights 3
Adds scale to Procedural Solutions –
Adds scale to Procedural Solutions –
Strengthens existing
Strengthens existing
call points and adds anesthesia call point with scale
call points and adds anesthesia call point with scale
Expands OUS footprint with direct sales channel in Europe,
Expands OUS footprint with direct sales channel in Europe,
Middle East and Asia
Middle East and Asia
EPS Accretive and meets ROIC hurdle in year 3
EPS Accretive and meets ROIC hurdle in year 3
©
2013 CareFusion Corporation or one of its subsidiaries. All rights reserved.
|
 Vital Signs at a
glance Overview
Overview
•
Division of GE Healthcare
•
~1,000 global employees
•
Located in Europe, Middle East, Asia
and the U.S
Key Capabilities
Key Capabilities
•
Strong brand and legacy in the
anesthesia market
•
OUS footprint with direct sales and
manufacturing
4
Respiratory
Anesthesia
Hemodynamics
Temperature
Management
US
66%
OUS
34%
Product Portfolio
Product Portfolio
•
~$250M revenue
©
2013 CareFusion Corporation or one of its subsidiaries. All rights reserved.
Geography
Geography |
 Infection
Prevention
Respiratory
Disposables
Medical
Specialties
Procedural Solutions
$1.22 Billion in FY13
Infusion
Dispensing
Medical Systems
$2.33 Billion in FY13
5
Improving the safety and cost of healthcare
Clinical Resources
Global Customer Support
Enterprise Technology and Software
Shared Research and Development
Respiratory
Infusion
Disposables
Skin prep
Surgical
Instruments
Interventional
Specialties
Ventilators
Diagnostics
Global Expansion
•
Customer Experience
•
Business Simplification
Vital Signs Strategic Fit
©
2013 CareFusion Corporation or one of its subsidiaries. All rights reserved.
|
 Investment
highlights Building scale and margin
Building scale and margin
•
Adds substantial presence outside U.S.
•
Fully integrated manufacturer vs.
specialty distributor
•
Adds new customer call point around
anesthesia
Key Milestones
Key Milestones
•
Entered Agreement Nov 17, 2013
•
Expected US close by Dec 31, 2013
•
Sales Integration by Q2 FY15
•
Exit TSA and achieve synergies run-
rate by FY17
Markets
Markets
•
Becoming a leader in $3.0 billion
market for respiratory and
anesthesia consumables
•
Expanding Specialty Disposables
business line outside of North
America
Synergies
Synergies
•
Leverages CareFusion corporate and
operational infrastructure to create
synergy opportunities of $10M-$15M
annually by year three
6
©
2013 CareFusion Corporation or one of its subsidiaries. All rights reserved.
|
 7
Updated Fiscal 2014 Guidance
November 18, 2013
FY14 Guidance
Provided Aug 8, 2013
FY14 Guidance
Updated¹
Total Revenue (constant currency)
1-4% (Organic)
4-7%
Medical Systems Revenue (constant currency)
1-4% (Organic)
1-4%
Procedural Solutions Revenue (constant currency)
2-4% (Organic)
11-13%
Adjusted Operating Margin
21-22%
21-22%
Adjusted Effective Tax Rate
28-30%
28-30%
Adjusted
Diluted
EPS
From
Continuing
Operations
$2.30-$2.40
$2.30-$2.40
Diluted
Weighted
Average
Shares
Outstanding
~215 million
~215 million
Operating Cash Flow
$500-$550 million
$500-$550 million
Capital Expenditures
~$110 million
~$110 million
©
2013 CareFusion Corporation or one of its subsidiaries. All rights reserved.
²
²
²
³
1
Updated FY14 Guidance reflects anticipated impact of the acquisition of Vital Signs announced on
November 18, 2013. 2
Adjusted amounts are non-GAAP financial measures. The Company’s presentation of these
adjusted financial measures historically excluded amortization of acquired intangibles, as well
as nonrecurring restructuring and acquisition integration charges and nonrecurring tax items.
Going forward, the Company intends to also exclude inventory valuation step-up charges from
acquisitions, as further discussed on the following slide. A GAAP to non-GAAP
reconciliation for adjusted diluted EPS from continuing operations can be found on the following slide.
3
On August 8, 2013 CareFusion announced a $750M share repurchase program. Outlook for diluted weighted
average shares outstanding reflects the impact of expected repurchases during fiscal
2014. |
 Non-GAAP
Reconciliations 8
Adjusted
EPS
1
Outlook
for
Fiscal
Year
Ending
June
30,
2014:
GAAP Diluted Earnings per Common Share from Continuing Operations
$1.96–$2.06
Estimated charges for nonrecurring items related to restructuring and
acquisition integration, net of tax (mid-point of an estimated range of
$0.07
to
$0.12
per
diluted
share)
$0.09
Estimated
charges
for
inventory
step-up
from
acquisitions
(mid-point
of
an
estimated
range
of
$0.03-$0.05)
2,3
$0.04
Estimated
acquisition-related
intangible
amortization,
net
of
tax
$0.21
Adjusted
Diluted
Earnings
per
Common
Share
from
Continuing
Operations
$2.30-$2.40
©
2013 CareFusion Corporation or one of its subsidiaries. All rights reserved.
1
Adjusted diluted earnings per common share from continuing operations
(“Adjusted EPS”) is a non-GAAP financial measure. The most directly comparable GAAP financial
measure is diluted earnings per common share from continuing operations.
2
Estimated charges for nonrecurring items related to restructuring and acquisition
integration include impact of the acquisition of Vital Signs as well as on-going projects.
Estimated charges for inventory step-up are primarily related to the
acquisition of Vital Signs. The company is currently unable to estimate the amount of amortization
associated
with
intangibles
expected
to
be
acquired
in
connection
with
the
acquisition
of
Vital
Signs.
Accordingly,
amounts
set
forth
in
the
table
above
for
acquisition-related
intangible amortization do not include amounts associated with the acquisition of
Vital Signs. 3
Historically,
the
company’s
presentation
of
Adjusted
EPS
excluded
amortization
of
acquired
intangibles,
as
well
as
nonrecurring
restructuring
and
acquisition
integration
charges and nonrecurring tax items. Going forward, the company intends to also
exclude inventory valuation step-up charges from acquisitions. In connection with acquisition
transactions,
including
the
proposed
acquisition
of
Vital
Signs,
the
company
acquires
inventory
that
is
recorded
at
fair
value
at
the
time
of
the
acquisition.
As
the
fair
value
of
acquired
finished
goods
inventory
is
recorded
at
the
anticipated
customer
sales
price
less
cost
to
sell,
which
is
generally
higher
than
the
historical
carrying
value,
the
company
must record a charge equal to the difference between the fair value and historical
carrying value as the underlying product is sold. Going forward, the company will exclude
the amount of inventory valuation step-up charges from its adjusted results, as
the company does not believe such non-cash charges are reflective of ongoing operating
results. Additional information regarding the company’s use of
non-GAAP financial measures can be found in the company’s Form 8-K furnished to the SEC on November
18, 2013 and on CareFusion’s website at www.carefusion.com under the Investors
tab. 2
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