Welcome!

Microsoft Cloud Authors: Srinivasan Sundara Rajan, Pat Romanski, Glenn Rossman, Janakiram MSV, Steven Mandel

News Feed Item

CareFusion Reports Preliminary First Quarter Fiscal 2013 Results

Provides update on Form 10-K filing

SAN DIEGO, Nov. 8, 2012 /PRNewswire/ -- CareFusion Corp. (NYSE: CFN) today reported preliminary results for its first quarter of fiscal 2013, ended Sept. 30, and provided an update on plans to file its Form 10-K for fiscal 2012. 

"We had another quarter of solid strategic progress and strong execution across the company, including balanced contributions from both segments," said Kieran T. Gallahue, chairman and CEO. "Our Medical Systems and Procedural Solutions segments performed in line with our expectations, putting us in a good position as we begin the year.

"While we are not able to provide a full financial update today, we now have a path toward completing the filing of our fiscal 2012 Form 10-K. As our Finance team completes this necessary work, the rest of our organization remains absolutely focused on our customers, as demonstrated in this quarter's results."

As previously disclosed, the company delayed the filing of its Form 10-K for fiscal 2012 to consult with the SEC about its accounting policy for sales-type leases in its Pyxis® medication and supply dispensing product lines.  As a result of these discussions, the company has determined that it will modify the manner in which it applies lease accounting principles to its Pyxis sales-type leases. The company is now in the process of analyzing the impact on its financials. The modified application of lease accounting principles will impact how the company records revenue for its sales-type leases.  As a result, the amount of revenue recorded at the inception of each lease and the amount recorded as finance income during the term of each lease may change. In some cases, more revenue may be recognized at the inception of the lease and, in other cases, more revenue may be recognized as finance income during the lease term.  However, this should not result in any change in the total amount of revenue recognized over the term of a lease. This matter also does not affect CareFusion customers or the underlying fundamentals and cash flows of the company or its Pyxis business.

Until this analysis is complete, CareFusion is unable to report its consolidated financial results. Accordingly, the company today provided selected operating and financial results compared to the quarter ended Sept. 30, 2011. These results are preliminary and remain subject to the completion of the company's quarterly review and the filing of its Form 10-Q for the quarter ended Sept. 30, 2012. Although the company plans to delay the filing of its Form 10-Q with the SEC beyond the Nov. 9 due date, CareFusion intends to file its Form 10-K and Form 10-Q as soon as possible after its accounting analysis is complete.

Medical Systems

Within the Medical Systems segment, revenue for the Infusion Systems business unit was ahead of company expectations, finishing the quarter at $203 million, a 1 percent decline from the prior year period. CareFusion previously said infusion revenue was expected to decline 5 percent during fiscal 2013 following a record year of infusion sales in fiscal 2012.

Revenue for the Respiratory Technologies business unit increased 4 percent from the prior year period to $97 million, driven by continued strength in ventilator sales that was partially offset by weakness in the respiratory diagnostics portfolio. Beginning this quarter, CareFusion is reporting financial results for its ventilation and respiratory diagnostics businesses together to reflect a change in the company's organizational structure.

Dispensing Technologies had another strong quarter, delivering results in line with company expectations. While CareFusion is unable to provide specific financial performance for its Dispensing Technologies business unit until it completes the analysis regarding its sales-type leases, the underlying fundamentals of the business, as well as the competitive landscape, remain unchanged. The company continues to execute well with the rollout of its new product platform and expand its business outside the U.S.

Procedural Solutions

First quarter revenue for the Procedural Solutions segment was $286 million, an increase of 1 percent from the prior year period. Segment profit increased 24 percent to $41 million, a 14 percent increase to $48 million on an adjusted basis.

Within the segment, revenue for the Infection Prevention business unit reached $144 million, a 4 percent increase from the prior year period based on strong sales growth of the company's clinically differentiated preoperative skin preparation and infusion specialty disposables product lines.

Contributions from the June 2012 acquisition of U.K. Medical and growth in the company's clinically differentiated interventional specialties portfolio drove a 3 percent increase in revenue in the Medical Specialties business unit to $80 million from $78 million in the prior year period.

As expected, revenue in the Specialty Disposables business unit declined, closing the quarter at $62 million, or 6 percent lower than the prior year period, as the company transitions its business model and portfolio of products.

Additional financial results

Operating expenses during the quarter totaled $293 million, a decrease of 5 percent from the prior year period. Excluding nonrecurring items and amortization of acquired intangibles, adjusted operating expenses decreased 1 percent to $276 million.

Selling, general and administrative (SG&A) expenses also fell during the quarter to $244 million, an 8 percent decrease from the prior year period. These ongoing cost-savings initiatives helped fund additional investments in research and development, which increased 27 percent to $47 million during the quarter. Adjusted SG&A expenses were $229 million, decreasing 5 percent from $242 million in the prior year period.

Operating cash flow from continuing operations was $78 million, an increase of $75 million over the prior year period.

Recent Highlights

Additional first quarter and recent highlights included:

  • Expanding CareFusion's global reach and respiratory product portfolio with a definitive agreement to acquire Intermed Equipamento Medico Hospitalar Ltda, a privately held, leading respiratory technologies company based in Sao Paulo, Brazil. The acquisition, which is expected to close this month, advances CareFusion's strategy to expand outside of the U.S. through investments that build scale and local capabilities in high-value markets. 
  • Previewing outside of the U.S. the Rowa Dose System, a new, automated concept for continuously packaging medication dosages for individual patients. The development of this new offering was accelerated through the acquisition of an early-stage technology in the fourth quarter of fiscal 2012.
  • Launching a new $500,000 Clinical Excellence grant program from the CareFusion Foundation to help identify and share infection prevention best practices across hospitals and health care facilities nationwide. 
  • Advancing CareFusion's system connectivity and device interoperability strategy by closely integrating the company's Pyxis medication dispensing technologies with Cerner's electronic health record system to help hospitals improve medication management and clinical workflows. This new offering, currently in limited release, is the latest development under a 2010 strategic agreement between CareFusion and Cerner that has also enabled the companies to connect Alaris® infusion pumps and the CareFusion Ventilation System with Cerner's CareAware iBus and Cerner Millennium.
  • Receiving 510(k) clearance from the U.S. Food and Drug Administration (FDA) for CareFusion's new Snowden-Pencer® take-apart laparoscopic scissors, the latest addition to the company's line of take-apart laparoscopic surgical instruments designed to facilitate sterilization and enhance ergonomics and performance. Currently in limited market release, the new Snowden-Pencer laparoscopic scissors are expected to be commercially available in early 2013.

Conference Call

CareFusion will host a webcast and conference call today at 2 p.m. PST (5 p.m. EST) to discuss the financial and operational results for the first quarter.

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) 599-9795 within the U.S. or (617) 786-2905 from outside the U.S., and use the access code 70745464. A replay of the conference call will be available from 4 p.m. PST (7 p.m. EST) on Nov. 8 through 8:59 p.m. PST (11:59 p.m. EST) on Nov. 15 and can be accessed by dialing (888) 286-8010 in the U.S. or (617) 801-6888 internationally and using the access code 35047396.

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™ and LTV® series ventilation and respiratory products, ChloraPrep® skin prep 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 http://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 SG&A expenses," which exclude amortization of acquired intangibles, as well as nonrecurring items related to the spinoff; and "adjusted operating expenses," and "adjusted segment profit," which exclude amortization of acquired intangibles, as well as nonrecurring items related to the spinoff and restructuring and acquisition integration charges. The most directly comparable GAAP financial measures for these non-GAAP financial measures are SG&A expenses, operating expenses and segment profit. The company has included below unaudited adjusted financial information for the quarters ended September 30, 2012 and 2011, which includes 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. 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: the modified application of lease accounting principles to our sales-type leases and the potential impact on our reported financial results and financial guidance; the timing for filing our Form 10-K for fiscal 2012 and Form 10-Q for the first quarter of fiscal 2013; 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. The CareFusion news release and the information contained herein reflect management's views as of Nov. 8, 2012. 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

SELECTED FINANCIAL DATA1

(UNAUDITED) 


















Quarter Ended
September 30,

Percent

(in millions)

2012

2011

Change







REVENUE:






Medical Systems2





Infusion Systems

$ 203

$ 206

(1) %


Respiratory Technologies3

97

93

4


Other


7

6

17








Procedural Solutions4





Infection Prevention 

$ 144

$ 138

4 %


Medical Specialties

80

78

3


Specialty Disposables

62

66

(6)


   Total Procedural Solutions

$ 286

$ 282

1







OPERATING EXPENSES:





Selling, General and Administrative Expenses

$ 244

$ 264

(8) %


Research and Development Expenses

47

37

27


Restructuring and Acquisition Integration Charges

2

7

(71)







OTHER ITEMS:






Interest Expense and Other, Net 

$ 20

$ 25

(20) %


Loss from Discontinued Operations, Net of Tax

(5)

(2)

150













WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:





Basic


221.9

223.8



Diluted


224.4

226.3














Adjusted Financial Measures:5



Operating Expenses

$ 276

$ 279


____________











1

All results are preliminary and remain subject to the completion of the company's quarterly review and the filing of its Form 10-Q for the quarter ended Sept. 30, 2012, including the completion of the company's analysis regarding its Dispensing sales-type leases, as discussed above.


2

Revenue for the Dispensing Technologies business unit intentionally omitted. As discussed above, until the analysis regarding the company's Dispensing sales-type leases is complete, the company is unable to report the financial results for its Dispensing Technologies business.


3

In July, 2012, the company began managing its Respiratory Diagnostics business as part of its Respiratory Technologies business unit within the Medical Systems reporting segment. Previously, the Respiratory Diagnostics business had been reported in Procedural Systems as Other. Prior period financials have been reclassified to conform to the current presentation.


4

Reflects the impact of businesses reclassified to discontinued operations.


5

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 following page.


 

CAREFUSION CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES1

(UNAUDITED)











Adjusted Financial Data:






Segment Profit 





Procedural

SG&A

Operating

(in millions)

Solutions

Expenses5

Expenses5,6






Quarter Ended September 30, 2012




GAAP


$ 41

$ 244

$ 293

   Restructuring and Acquisition Integration2

1

-

(2)

   Amortization of acquired intangibles4

6

(15)

(15)

Adjusted


$ 48

$ 229

$ 276






Quarter Ended September 30, 2011




GAAP


$ 33

$ 264

$ 308

   Restructuring and Acquisition Integration2

2

-

(7)

   Spinoff3

2

(4)

(4)

   Amortization of acquired intangibles4

5

(18)

(18)

Adjusted


$ 42

$ 242

$ 279

____________




1

All results are preliminary and remain subject to the completion of the company's quarterly review and the filing of its Form 10-Q for the quarter ended Sept. 30, 2012, including the completion of the company's analysis regarding its Dispensing sales-type leases, as discussed above.


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

Amortization of acquired intangibles relate to the non-cash expenses associated with amortization of identifiable intangible assets of acquired businesses.


5

Reflects company expenses on a consolidated basis.


6

Operating expenses consist of selling, general and administrative, research and development, and restructuring and acquisition integration expenses.

SOURCE CareFusion Corp.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at EMC, will introduce a methodology for capturing, enriching and sharing data (and analytics) across the organizati...
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
SYS-CON Events announced today that China Unicom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE F...
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Digital innovation is the next big wave of business transformation based on digital technologies of which IoT and Big Data are key components, For example: Business boundary innovation is a challenge to excavate third-party business value using IoT and BigData, like Nest Business structure innovation may propose re-building business structure from scratch, as Uber does in the taxicab industry The social model innovation is also a big challenge to the new social architecture with the design fr...
SYS-CON Events announced today that Pulzze Systems will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems, Inc. provides infrastructure products for the Internet of Things to enable any connected device and system to carry out matched operations without programming. For more information, visit http://www.pulzzesystems.com.
IoT is fundamentally transforming the auto industry, turning the vehicle into a hub for connected services, including safety, infotainment and usage-based insurance. Auto manufacturers – and businesses across all verticals – have built an entire ecosystem around the Connected Car, creating new customer touch points and revenue streams. In his session at @ThingsExpo, Macario Namie, Head of IoT Strategy at Cisco Jasper, will share real-world examples of how IoT transforms the car from a static p...
Big Data has been changing the world. IoT fuels the further transformation recently. How are Big Data and IoT related? In his session at @BigDataExpo, Tony Shan, a renowned visionary and thought leader, will explore the interplay of Big Data and IoT. He will anatomize Big Data and IoT separately in terms of what, which, why, where, when, who, how and how much. He will then analyze the relationship between IoT and Big Data, specifically the drilldown of how the 4Vs of Big Data (Volume, Variety,...
Video experiences should be unique and exciting! But that doesn’t mean you need to patch all the pieces yourself. Users demand rich and engaging experiences and new ways to connect with you. But creating robust video applications at scale can be complicated, time-consuming and expensive. In his session at @ThingsExpo, Zohar Babin, Vice President of Platform, Ecosystem and Community at Kaltura, will discuss how VPaaS enables you to move fast, creating scalable video experiences that reach your...
The many IoT deployments around the world are busy integrating smart devices and sensors into their enterprise IT infrastructures. Yet all of this technology – and there are an amazing number of choices – is of no use without the software to gather, communicate, and analyze the new data flows. Without software, there is no IT. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the protocols that communicate data and the emerging data analy...
WebRTC adoption has generated a wave of creative uses of communications and collaboration through websites, sales apps, customer care and business applications. As WebRTC has become more mainstream it has evolved to use cases beyond the original peer-to-peer case, which has led to a repeating requirement for interoperability with existing infrastructures. In his session at @ThingsExpo, Graham Holt, Executive Vice President of Daitan Group, will cover implementation examples that have enabled ea...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...