Cardinal Health, Inc.

Good day and welcome to the Cardinal Health, Inc. Second Quarter Fiscal Year 2020 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Kevin Moran. Please go ahead.

Good morning and thank you for joining us as we discuss Cardinal Health Second Quarter Fiscal 2020 results. I'm Kevin Moran, Vice President of Investor Relations, and joining me today are Mike Kaufman, our Chief Executive Officer, and Dave Evans, our Interim Chief Financial Officer. 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 the 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, including an update to our FY20 outlook, will be on a non-GAAP basis unless they are specifically called out as GAAP. GAP to non-GAP reconciliations for all relevant periods can be found in the schedules attached to our press release. During the Q&A portion of today's call, we kindly ask that you limit yourself to one question with one follow-up so that we can try and get everyone an opportunity to ask a question. With that, I'll now turn the call over to Mike.

Good morning, and thanks for joining us. Before we discuss our Q2 performance and our outlook for the year, I would like to reiterate a few things we shared last Thursday regarding voluntary recalls for any Level 3 surgical gowns and certain free source packs containing those affected gowns. The full press release and additional information regarding this issue can be found on our website. First and foremost, we apologize to our customers and their patients. We understand the gravity of this situation and are dedicated to resolving this issue as quickly as possible. Simultaneously, we are doing everything we can to prevent this from happening again. We are engaging third-party experts to conduct a comprehensive review of our quality assurance processes and business practices, and we are committed to executing corrective and preventative actions. As we shared last week, related to these recalls, we recorded a $96 million charge in our Q2 GAAP results. This charge represents our best estimate of cost for the recalls, including inventory write-offs, as well as certain remediation and supply disruption costs, such as cost to replace recalled products. To provide some clarity, $56 million of this is within cost of products sold and $40 million is within SG&A. This charge and any future adjustments made to it will be excluded from our non-GAAP financial results. On behalf of the entire Cardinal Health leadership team, I would like to thank our employees for their dedication and tireless effort. All of us, myself included, are focused on resolving this issue as quickly as possible for our customers and their patients. I'll now turn the call over to Dave to walk through our Q2 results and updated Fiscal 20 outlook, and then I'll share some thoughts on our path forward.