Cardinal Health, Inc.

Ladies and gentlemen, please stand by. We are about to begin. Good day and welcome to the Cardinal Health, Inc. Third Quarter Fiscal Year 2019 Earnings Conference Call. Today's conference is being recorded. Now, at this time, I would like to turn the conference over to Ms. Lisa Capodici. Please go ahead, ma'am.

Thank you, Jake. Good morning and welcome to Cardinal Health's Third Quarter Fiscal 2019 Earnings Call. I'm joined today by our CEO, Mike Kaufman, and Chief Financial Officer, Jorge Gomez. During the call, we will provide details on our third quarter results and full year outlook. You can find today's press release and presentation on the IR section of our website at ir.cardinalhealth.com. During the call, we will be making forward-looking statements. The matters addressed in the statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Please refer to our SEC filings and the forward-looking statement slide at the beginning of our presentation for a description of these risks and uncertainties. During the discussion today, our comments will be on a non-GAAP basis unless they are specifically called out as GAAP. Our GAAP to non-GAAP reconciliations for all relevant periods can be found in the schedules attached to our press release. In addition, During the call, we will provide an update to our FY19 outlook on a non-GAAP basis. We do not provide guidance on a GAAP basis due to the difficulty in predicting items that we exclude from our non-GAAP earnings per share and non-GAAP effective tax rates. During the Q&A portion of today's call, we will ask that you limit your questions to one with one follow-up so that we may give everyone in the queue a chance to ask a question. As always, the IR team will be available after this call, so feel free to reach out to us with any additional questions. I will now turn the call over to Mike.

Thanks, Lisa, and good morning, everyone. Today I'll begin with some comments on our third quarter of fiscal 2019, and then I'll discuss our progress on a number of fronts to drive future growth. Overall, for the third quarter, revenue was up 5%, and operating results were in line with our expectations. Non-GAAP EPS for the quarter was $1.59, up 14% from the prior year. Based on the year-to-date performance and our current expectations for Q4, we are raising the bottom end of our EPS guidance to a new range of $5.02 to $5.17. As I reflect on the quarter, we made progress in several areas, including our strategic initiatives, and the team is focused on delivering full-year expectations as we navigate the current healthcare environment. As I have recently spent time with our upstream and downstream customers, I am hearing from both that what we do and how we do it are as important today as they have ever been. We have scaled businesses that are important to our customer success as they look for the most efficient ways to deliver high-quality care to patients. Our commitment to innovation and strong customer focus were keys to recent pharma renewals. Most notably, we've extended our distribution agreements with CVS Health for four years, beginning July 1st. We look forward to working hand in hand with CVS Health to further enhance our relationship with them. In that regard, we continue to work with all of our customers across our portfolio of business as they balance their commitment to deliver high quality care with the need for efficiency. For example, retail independent pharmacy customers have navigated years of change in their pharmacies and we've been right by their sides, helping them succeed in learning in the process. We are advancing solutions that help them address reimbursement, manage their inventory, and place the right focus on the front of store. In addition, through our connected care platforms, we offer pharmacies medication therapy management services and the ability to communicate with patients to help them follow their prescribed course of care. We continue to develop these types of strategic capabilities as they enable our customers to navigate the evolving pharmacy landscape where improving both patient care and the linkage among providers, payers, pharmacies, and patients remains critical. In our generics program, we are seeing market dynamics and program performance consistent with prior quarters. We continue to invest in data and analytics and allocate significant time to improving the overall performance of our generics program, which is key for long-term growth in the pharmaceutical segment. Our commitment to innovation, our customers, and their success is also bearing fruit across the balance of the pharmaceutical segment, where we are seeing strong positive contributions to earnings from both specialty and nuclear. Turning to medical, while we have made significant strides, we are disappointed with the segment performance this quarter. We would like to see quicker progress on several initiatives, including our global cost structure. We continue to actively evaluate how we can accelerate our progress here while balancing our commitment to maintain service levels and deliver an outstanding customer experience. We are moving with a sense of urgency to address the opportunities for improvement we've identified in the medical segment. Importantly, the patient recovery primary TSA exits are now complete leaving just a few minor exits and actions. At Cordis, the stabilization program remains on track. We continue to see improving service levels and fill rates, lower back orders, and increased cost discipline. Cardinal Health at Home and our services businesses continue to flourish. Services continues to expand its niche. providing value-added technology and logistic support to our partners, while the at-home business is capitalizing on a number of larger healthcare trends. Let me briefly touch on our strategic priorities. As I have shared already this morning, we are making progress in our pharma segment, Cordis, and patient recovery. The team has also made excellent strides on our overall cost structure, and we are already realizing the benefit in our results. Regarding capital deployment, I would note that we continue to execute a very disciplined and thoughtful strategy to fund the future growth of the business, return cash to shareholders, and maintain our healthy balance sheet, and Jorge will share the details. Altogether, we remain highly focused on how we can deliver the greatest value and be nimble in the ever-changing healthcare environment so that we can respond to our customers' challenges. We know that our success begins with an emphasis on the longer term, a balanced, thoughtful approach to how we prioritize and deploy capital, and discipline in our cost structure. The team is focused on executing across both our newer and existing businesses, investing in what makes us stronger, and continuing our essential role in the healthcare system. The value we provide to customers and suppliers is as strong today as it has ever been. I want to thank our entire team for the work they are doing. We look forward to continuing to deliver for our customers, shareholders, employees, and the communities we serve. With that, let me turn it over to Jorge.