Cardinal Health

In 1971, Robert Walter founds Cardinal Foods, Inc., a food wholesaler. Cardinal Foods moves into drug wholesaling with the purchase of the Bailey Drug Company. With this addition, Cardinal Foods is renamed Cardinal Distribution, Inc. In 1994, Cardinal Distribution, Inc. becomes Cardinal Health, Inc. Robert D. Walter is founder, chairman and chief executive officer of Cardinal Health. Walter believes that growth and consistent performance can only be achieved through the drive and entrepreneurial spirit of talented people. Cardinal Health is a fortune 500 stock listed company trading under the symbol CAH. The company has a good proven stock performance record.

For the year revenues totaled 74.9 billion dollars with operating earnings of 1.8 billion dollars. Diluted earnings per share from continuing operations, excluding special items, were 2.85 dollars. Within the company’s four reporting segments they experienced a mix of consistent, steady performance with some notable operational challenges. The Pharmaceutical Distribution and Provider Services segment reported strong revenue growth of 16 percent, to 61 billion dollars and operating earnings of 1 billion dollars, down two percent from the prior year due to the volatility in branded vendor margins as they managed through the fee-for-service transition. Their negotiations with manufacturers demonstrate that Cardinal Health remains a highly efficient, critical link in the chain of care. Going forward, they expect continued strong revenue growth, more predictable profit margins and a return to strong operating earnings growth.

The company’s medical products and services business posted yet another year of solid revenue performance, with sales rising seven percent to 9.8 billion dollars. Earnings declined three percent down to 672 million dollars as this business worked to overcome competitive pricing pressures and significant increases in raw material and fuel costs. The introduction of disciplined expense controls, new international product sourcing strategies and new product introductions, as well as facility rationalizations as part of One Cardinal Health, are all expected to contribute to a return to earnings growth in fiscal 2006. In fact, they expect continued solid revenue growth, with earnings growing faster than revenue in this business.

The company has preserved a longstanding tradition of honesty and integrity and, ultimately, success, by never letting ourselves get lax in these values. They are committed to provide integrated health-care solutions that connect their capabilities in supply chain management, medication management, clinical services and manufacturing in ways that allow them to innovate and create compelling value for customers.