Attached files
 Q3 and
9-Months Fiscal 2011 Investor/Analyst Call
May 5, 2011
Exhibit 99.2
©
2011 CareFusion
Corporation or one of its subsidiaries. All rights reserved. |
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
2
Forward-Looking Statements, GAAP
Reconciliation and ISP Divestiture
“Safe
Harbor”
Statement
under
the
Private
Securities
Litigation
Reform
Act
of
1995:
This
presentation
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; 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. This presentation reflects management’s views as of
May 5, 2011. Except to the extent required
by
applicable
law,
we
undertake
no
obligation
to
update
or
revise
any
forward-looking
statement.
Non-GAAP Financial Measures:
The financial information included in this presentation includes Non-GAAP financial
measures.
Reconciliations
can
be
found
on
slides
15
and
16
of
this
presentation.
In
addition,
definitions
and
reconciling
information
can
be
found
on
CareFusion’s
website
at
www.carefusion.com
under
the
Investors
tab.
ISP
Divestiture:
Results
from
the
company’s
International
Surgical
Products
(ISP)
business,
which
had
been
included
in
the Medical Technologies and Services segment and was divested in April 2011, have been
classified as discontinued operations
as
of
Q3
Fiscal
2011.
Reported
results
for
continuing
operations
and
comparisons
to
prior
periods
exclude
the
historical results of the ISP business. |
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
3
Today’s Speakers
•
Kieran Gallahue, Chairman and Chief Executive
Officer
•
Jim Hinrichs, Chief Financial Officer |
 Q3 and
9-Months Fiscal 2011 Results
©
2011 CareFusion
Corporation or one of its subsidiaries. All rights reserved. |
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
5
Q3 Fiscal 2011 Year-Over-Year
Quarterly Review
GAAP
Adjusted
$M
% Change
1
$M
% Change
1
Revenue
$867
4%
$867
4%
Operating Expenses
2
$301
(8)%
$292
(6)%
Operating Income
2
$146
70%
$155
49%
Income from Continuing
Operations
2
$86
762%
$94
77%
Diluted EPS from Continuing
Operations
$0.38
733%
$0.42
75%
1
% Change over prior year period.
2
Adjusted amounts are Non-GAAP financial measures that exclude nonrecurring
items primarily related to the spinoff, nonrecurring restructuring and
acquisition integration charges and nonrecurring gain on the sale of assets.
Additionally, in the case of adjusted income from continuing operations and
adjusted diluted earnings per share from continuing operations, nonrecurring tax
items are also excluded. 2 |
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
6
Q3 Fiscal 2011 Year-Over-Year
Quarterly Segment Review
GAAP
Adjusted
Critical Care Technologies (CCT)
$M
% Change
1
$M
% Change
1
Revenues
$661
5%
$661
5%
Segment Profit
2
$115
49%
$129
43%
Medical Technologies and Services
(MTS)
$M
% Change
1
$M
% Change
1
Revenues
$206
(1)%
$206
(1)%
Segment Profit
2
$16
78%
$26
86%
1
% Change over prior year
period. 2 Adjusted segment profit is a Non-GAAP financial measure that
excludes nonrecurring items primarily related to the spinoff and nonrecurring restructuring and
acquisition integration charges. During the quarter ended March 31, 2011, the company recognized a $15 million gain on the sale of assets related to
the divestiture of its OnSite Services business, which was not allocated to the segments and is not
reflected in the above results. |
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
7
9-Months Fiscal 2011 Review
GAAP
Adjusted
$M
% Change
1
$M
% Change
1
Revenue
$2,564
1%
$2,564
1%
Operating Expenses
2
$958
--
$882
(2)%
Operating Income
2
$347
7%
$423
13%
Income from Continuing
Operations
$195
76%
$253
14%
Diluted EPS from Continuing
Operations
$0.87
74%
$1.13
14%
1
% Change over prior year period.
2
Adjusted amounts are Non-GAAP financial measures that exclude nonrecurring
items primarily related to the spinoff, nonrecurring restructuring and
acquisition integration charges and nonrecurring gain on the sale of assets.
Additionally, in the case of adjusted income from continuing operations and
adjusted diluted earnings per share from continuing operations, nonrecurring tax
items are also excluded. 2
2 |
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
8
9-Months Fiscal 2011 Segment
Review
GAAP
Adjusted
Critical Care Technologies (CCT)
$M
% Change
1
$M
% Change
1
Revenues
$1,962
2%
$1,962
2%
Segment Profit
2
$298
3%
$357
9%
Medical Technologies and Services
(MTS)
$M
% Change
1
$M
% Change
1
Revenues
$602
(2)%
$602
(2)%
Segment Profit
2
$34
--
$66
35%
1
% Change over prior year period.
2
Adjusted segment profit is a Non-GAAP financial measure that excludes
nonrecurring items primarily related to the spinoff and nonrecurring restructuring and
acquisition integration charges. During the quarter ended March 31, 2011, the
company recognized a $15 million gain on the sale of assets related to the
divestiture of its OnSite Services business, which was not allocated to the segments and is not reflected in the above results. |
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
Fiscal 2011
Guidance |
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
Fiscal 2011 Financial Guidance
May 5, 2011
1
Provided by CareFusion on February 3, 2011.
2
3
Assumes foreign exchange rates as of March 31, 2011.
4
Adjusted amounts are Non-GAAP financial measures that exclude nonrecurring
items primarily related to the spinoff, nonrecurring restructuring and acquisition
integration
charges
and
nonrecurring
gain
on
the
sale
of
assets. Additionally, in the case of adjusted effective tax rate
and adjusted diluted earnings per share
from continuing operations, nonrecurring tax items are also excluded.
5
Nonrecurring items are primarily related to the spinoff and to restructuring and
acquisition integration charges. 10
$ in millions
Previous
FY11
Outlook
1,2
Updated FY11 Outlook
Total Revenue
Low single digit growth over FY10
revenue of $3.5B on a reported and
constant currency basis
Low single digit growth over FY10
revenue of $3.5B on a reported and
constant
currency
basis
Adjusted
Operating
Expenses
4
34% of total revenue
34% of total revenue
Gross Margin
50 –
51%
50 –
51%
Adjusted
Operating
Margin
4
~17%
~17%
Adjusted
Effective
Tax
Rate
4
28 –
30%
28 –
30%
Adjusted
Diluted
EPS From Continuing
Operations
4
$1.58 –
$1.65
$1.60 –
$1.65
Nonrecurring
Items
5
$120
$120
Diluted Weighted Average Shares
Outstanding
~225M
~225M
Capital Expenditures
$150 –
$160
$150 –
$160
3
Reflects impact of the divestitures of OnSite Services and International Surgical Products (ISP)
businesses. Assumes the OnSite divestiture reduces revenues and adjusted diluted EPS by
approximately $13 million and $0.01, respectively, in Q4 FY11. Assumes the ISP divestiture reduces revenues and adjusted diluted
EPS by approximately $440 million and $0.06, respectively, for FY11.
|
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
Updated Fiscal 2011 Revenue and
Adjusted EPS Guidance and Assumptions
Guidance
•
Revenue growth of low single digits
•
Adjusted diluted EPS from continuing operations of
$1.60 to $1.65
Assumptions
•
Hospital capital spending grows low to mid single digits;
customers continue prioritizing spending
•
Q4 revenues and adjusted earnings increase year-over-year
and sequentially from Q3 based on trends in capital
equipment
businesses
and
growth
in
our
ChloraPrep
®
business
•
Foreign exchange rates remain at March 31, 2011 levels
11 |
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
12
Updated Fiscal 2011 CCT Segment-related
Assumptions vs. Fiscal 2010 Results
•
Segment revenue grows on a percentage basis by
low to mid single digits
Infusion:
Revenues grow on a percentage basis in the low
teens due to Medegen acquisition and from incremental
market share gains in 2H FY11 following FDA requirement
for Baxter to remove its Colleague pump base within two
years
Respiratory:
Revenues are down mid to high single digits
year-over-year as sales related to H1N1 have not
reoccurred this year
Dispensing:
Revenues grow on a percentage basis by low
to mid single digits |
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
13
Updated Fiscal 2011 MTS Segment-related
Assumptions vs. Fiscal 2010 Results
•
Segment revenue essentially flat
ChloraPrep
®
business:
Grows double digits based on
successful execution of growth strategy both domestically
and internationally
International Surgical Products divested: Closed in April 2011
and included in discontinued operations as of Q3 FY11
OnSite Services divested:
Closed in March 2011 and was
not classified as discontinued operations; negatively
impacts top line by $13 million and adjusted diluted EPS
by $0.01 in Q4 FY11
Research Services divested:
Closed in May 2010 and was
not classified as discontinued operations; negatively
impacts top line by $59 million in FY11 |
 Q&A
©
2011 CareFusion
Corporation or one of its subsidiaries. All rights reserved. |
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
15
Q3 Fiscal 2011 Non-GAAP
Reconciliations
$ in millions
Q3 FY11
GAAP
Nonrecurring
Items
Q3 FY11
Adjusted
Operating Expenses
1
$301
$(9)
$292
Operating Income
1
$146
$9
$155
Income From Continuing
Operations
1
$86
$8
$94
Diluted EPS From Continuing
Operations
1
$0.38
$0.03
$0.42
Critical Care Technologies
Segment Profit
2
$115
$14
$129
Medical Technologies and Services
Segment
Profit
2
$16
$10
$26
1
2
The nonrecurring items in the table above include items primarily related to the spinoff,
restructuring and acquisition integration charges and gain on the sale of assets. Additionally,
in the case of income from continuing operations and diluted earnings per share from continuing operations, nonrecurring items also include
tax items.
The nonrecurring items in the table above include items primarily related to the spinoff
and restructuring and acquisition integration charges. During the quarter ended March 31, 2011,
the company recognized a $15 million gain on the sale of assets related to the divestiture of its OnSite Services business, which was not
allocated to the segments and is not reflected in the above results.
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 May 5, 2011.
Note:
A
full
GAAP
to
non-GAAP
reconciliation
can
be
found
on
CareFusion’s
website
at
www.carefusion.com
under
the
Investors
tab.
A
discussion
of
the |
 ©
2011 CareFusion Corporation or one of its subsidiaries. All rights reserved.
16
9-Months Fiscal 2011 Non-GAAP
Reconciliations
$ in millions
9-Months FY11
GAAP
Nonrecurring
Items
9-Months FY11
Adjusted
Operating Expenses
1
$958
$(76)
$882
Operating Income
1
$347
$76
$423
Income From Continuing
Operations
1
$195
$58
$253
Diluted EPS From Continuing
Operations
1
$0.87
$0.26
$1.13
Critical Care Technologies
Segment Profit
2
$298
$59
$357
Medical Technologies and Services
Segment Profit
2
$34
$32
$66
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 May 5, 2011.
Note:
A
full
GAAP
to
non-GAAP
reconciliation
can
be
found
on
CareFusion’s
website
at
www.carefusion.com
under
the
Investors
tab.
A
discussion
of
the
1
2
The nonrecurring items in the table above include items primarily related to the spinoff,
restructuring and acquisition integration charges and gain on the sale of assets. Additionally,
in the case of income from continuing operations and diluted earnings per share from continuing operations, nonrecurring items also include
tax items.
The nonrecurring items in the table above include items primarily related to the spinoff and
restructuring and acquisition integration charges. During the quarter ended March 31, 2011, the
company recognized a $15 million gain on the sale of assets related to the divestiture of its OnSite Services business, which was not
allocated to the segments and is not reflected in the above results.
|