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Cardinal Health Declares Three-For-Two Stock Split, Plans 25% Dividend Increase

DUBLIN, Ohio, Feb. 27 /PRNewswire/ -- Cardinal Health, Inc. (NYSE: CAH), a leading provider of products and services supporting the health-care industry, announced today a three-for-two stock split payable on April 20, 2001, to shareholders of record on April 5, 2001. This marks the tenth stock split or stock dividend distributed by Cardinal Health during the last 16 years. Cash will be paid in lieu of fractional shares created by the split based on the closing price of Cardinal Health's stock on the New York Stock Exchange on the record date, adjusted for the split.

In addition, Cardinal Health said its management has recommended to its board of directors that the company's next regular cash dividend following the effective date of the three-for-two stock split be increased by 25 percent, from the current annual post-split rate of $0.08 to $0.10 per share.

Restated Financials Following Bindley Western Merger Indicate Strong

Momentum

Cardinal Health also announced that its financial statements restated for the February 14, 2001 merger with Bindley Western Industries are now available. Bindley Western's results are included in Cardinal's Pharmaceutical Distribution and Provider Services segment, one of Cardinal Health's four reporting segments.

Chairman and Chief Executive Officer Robert D. Walter said the merger with Bindley Western, "combines two of the fastest growing pharmaceutical distributors. In the just-completed quarter ended December 31, 2000, Bindley's stand-alone performance was exceptional. The company grew operating revenue by 37 percent and operating earnings by an impressive 31 percent." Including Bindley Western, Cardinal Health's Pharmaceutical Distribution and Provider Services segment increased operating revenues by 32 percent, up nearly $1.9 billion, to $7.7 billion for the same quarter. Operating earnings also rose 32 percent, with return on committed capital rising 400 basis points to 25.5 percent. The financial performance of Cardinal Health's remaining three reporting segments did not require restatements.

Investors can access the updated financial workbook by visiting Cardinal Health's Website at www.cardinal.com and accessing the Investor Center, or by contacting the company's investor relations department at (614)-757-5222.

Management Affirms Goal of 20% Earnings Growth For FY 2001 and 2002

"The addition of Bindley Western gives us further confidence that we will continue to meet our long-term objective of growing annual earnings per share by 20 percent as well as improving our returns on capital while increasing investments in our businesses," Mr. Walter said. "Cardinal Health's robust performance continues to be driven by our improving business mix, our industry-leading positions, the diversity of our earnings and the overall expected growth of the healthcare and pharmaceutical industry. We expect to achieve our goal of growing earnings per share by 20 percent for the current fiscal year as well as our 2002 fiscal year and beyond, while continuing to improve returns on capital in each of our business segments. That level of growth in our 2001 fiscal year includes a planned 80 percent increase in investment spending," he added.

Following its restatement for the Bindley Western merger, which was completed February 14, 2001, Cardinal Health issued the following overview of its four segments:

The Pharmaceutical Distribution and Provider Services segment continues to be Cardinal Health's largest and fastest-growing segment, comprising 80 percent of the corporation's total operating revenue and 49 percent of its operating earnings. For the six months ended December 31, 2000, this segment grew operating revenue and operating earnings by 28 percent. The segment's performance is exceeding expectations and is expected to be a strong driver of the company's growth for the rest of fiscal year 2001 and into fiscal year 2002 and beyond. For the 2001 fiscal year, operating revenues and operating earnings in the segment are each expected to grow faster than the earlier forecasts of 20 percent. Return on committed capital also is expected to continue improving.

The Medical-Surgical Products and Services segment represents 16 percent of the corporation's operating revenues and 26 percent of its operating earnings. First-half operating revenues were up 14 percent, and operating earnings grew by 19 percent. Management reaffirms its expectations to grow operating earnings for the 2001 and 2002 fiscal years consistent with historical growth rates in this segment, while continuing to improve returns on committed capital. Segment results in the 2002 fiscal year are expected to benefit from the continued successful integration of Bergen Brunswig Medical Corporation and its related operational synergies, access to new markets and other opportunities for improved returns.

The Pharmaceutical Technologies and Services segment represents 3 percent of operating revenues and 14 percent of operating earnings for the corporation. The segment's first-half operating revenue growth of 7 percent and operating earnings growth of 13 percent was in line with forecasts. As previously reported in Cardinal Health's second quarter earnings release, this segment is experiencing a slowdown related to declining demand for protease inhibitors and U.S. health and nutritional products. As a result, operating revenue and operating earnings growth for the second half of the 2001 fiscal year are not expected to accelerate as previously forecasted; nevertheless, return on committed capital is expected to continue to improve. Cardinal Health continues to invest heavily in this segment's product development pipeline and other initiatives. Those investments are expected to drive future growth in operating earnings and improvements in return on capital.

The Automation and Information Services segment comprises 1 percent of the corporation's operating revenues and 11 percent of its operating earnings. This segment had operating revenue growth of 21 percent and operating earnings growth of 22 percent through the first half of the 2001 fiscal year. For the second half of the 2001 fiscal year, operating earnings growth is expected to improve consistent with management's earlier forecasts. Sales growth and improved return on committed capital for the remainder of fiscal year 2001 as well as fiscal year 2002 are expected to be driven by continued new product introductions including sales of the next generation of SUPPLYSTATION(R) as well as PATIENTSTATION(TM) and Vistant Corporation's new product lines. Vistant is a new company formed to apply Pyxis technologies to the industrial, non-healthcare marketplace.

"The stock split, recommended dividend increase and commitment to investment spending underscore our confidence in Cardinal Health's ability to meet its long-term objective of growing annual earnings per share by 20 percent for the future while improving returns on capital," Mr. Walter said.

Cardinal Health, Inc. ( http://www.cardinal.com ) is a leading provider of products and services supporting the health-care industry. Cardinal Health companies develop, manufacture, package and market products for patient care; develop drug-delivery technologies; distribute pharmaceuticals, medical surgical and laboratory supplies; and offer consulting and other services that improve quality and efficiency in health care. The company employs more than 43,000 people on five continents and produces annualized revenues exceeding $38 billion.

Except for historical information, all other information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking information and statements in this news release are subject to various risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These risks and uncertainties include but are not limited to: those discussed or identified in the public filings with the U.S. Securities and Exchange Commission (SEC) made by Cardinal Health; risks and uncertainties with respect to Cardinal Health's expectations regarding the accounting and tax treatment of acquisitions, the value of merger consideration, growth opportunities, earnings accretion, cost savings, revenue enhancements, synergies and other benefits anticipated from acquisition transactions; the costs and effects of government regulation and legal and administrative proceedings; difficulties related to integrating acquired businesses; the effect of any changes in customer and supplier relationships and customer purchasing patterns, shifts in the growth rates among segments driven by various factors, general consumer perceptions of health-related concerns or the distribution outsourcing pattern for health-care products and/or services and of general economic conditions such as changes in interest rates and the performance of the financial markets, changes in domestic and foreign laws, regulations and taxes, changes in competition and pricing environments, and general market and industry conditions. Cardinal undertakes no obligation to publicly update or revise any forward-looking statements.

SOURCE Cardinal Health, Inc.

CONTACT: Investors, Stephen T. Fischbach, 614-757-7067, or Media, Geoffrey Fenton, 614-757-7871, both of Cardinal Health/