Cardinal Health, Inc.

Good day and welcome to the Cardinal Health, Inc. Fourth Quarter Fiscal Year 2019 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Lisa Capodici. Please go ahead.

Thank you, John. Good morning and welcome to Cardinal Health's Fourth Quarter Fiscal 2019 Earnings Call. I am joined today by our CEO, Mike Kauffman, and Chief Financial Officer, Jorge Gomez. During the call, we will provide details on our fourth quarter and full year results and also provide guidance for fiscal year 20. 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 reconciliation for all relevant periods can be found in the schedules attached to our press release. In addition, during the call, we will provide forward-looking guidance for Fiscal 20 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 rate. During the Q&A portion of today's call, we 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 questions. I will now turn the call over to Mike.

Thanks, Lisa. Good morning, everyone, and thanks for joining us. Let me begin by providing a few thoughts on fiscal 19 before turning it over to Jorge to discuss the financial results for Q4 and for the year. Then I'll share some perspective on our fiscal 20 outlook and our commitment to future growth. In the last 18 months, we addressed various business challenges and put near and long-term plans in place to grow in the future. Importantly, in fiscal 19, we delivered on the overall commitments that we made at the beginning of the year. Some of our highlights from fiscal 19, including progress against the six strategic priorities we outlined a year ago, are as follows. Notably, we exceeded our initial EPS guidance, delivering $5.28 per share. we continue to see double-digit revenue and profit growth in specialty, Cardinal Health at Home, and medical services as we advance these strategic growth areas. With the recent renewals of CVS Health and Kroger, we now have contracts with our three largest customers for at least the next four years. Regarding our cost structure, we have been engaged in a cost optimization program and the initial work has exceeded our savings targets. We delivered $133 million this year, positioning us to make strategic reinvestments and generate significant future savings. For capital deployment, our focus on strong cash flow generation resulted in operating cash flow of $2.7 billion for the year. We delivered value to our shareholders in the form of dividends and share buybacks, and we improved our financial flexibility while continuing to reinvest in the business. In the portfolio and partnerships area, we took steps as part of our ongoing portfolio management strategy. During the year, we rationalized and exited underperforming geographies and finalized the partnership to accelerate the growth for the NAVA Health business. With respect to pharma, we are pleased that our pharma distribution business met plan for the year. However, meeting the plan is not enough. We are focused on returning to sustainable, profitable growth. To achieve this, we have work underway across the few key areas that I'll discuss when I cover our future outlook. Turning to medical, While we improved execution across the segment during the year, we did not meet our expectations. Challenges from Cardinal Health brand products, including costs associated with supply chain infrastructure and commodities, prevented this ongoing work from translating to the bottom line this year. I'll discuss this in more detail when I talk about fiscal 20. A quick update on Cordis. This business is on a path to profitability with sustained top line growth in many geographies and improving trends for fill rates and back orders. Additionally, we improved fill rates in our medical solutions business, which includes patient recovery. Overall, we made positive strides in fiscal 19 and we have confidence in our strategic direction and our ability to translate this work into results in the future. to provide some additional color on Q4 and fiscal 19, I'll turn it over to Jorge.