Cardinal Health Inc. F1Q09 (Qtr. End 09/30/08) Earnings Conference Call Transcript

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2008-10-29 17:25:21.0

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Question-and-Answer Session

[Operator Instructions]. And the first question comes from the line of Tom Gallucci from Merrill Lynch. Please proceed.

Tom Gallucci - Merrill Lynch

Good morning. Thank you very much. I had one each, hopefully for Dave and for George. Dave, just wondering you gave some steps there in consumable, individual product lines, as you look at your whole segment, any idea of what consumables are as a percent of revenue and what are the margins are in that business?

And then for George, it seems like maybe did you take market share or your existing customers just growing very well, particularly in that independent business that you noted. The DSP is up despite the loss of independent. So can you just describe where that business is coming from? Thank you.

Dave Schlotterbeck - Vice Chairman, Cardinal Health and Chief Executive Officer, Clinical and Medical Products

Thanks for the question, Tom. I'll take the first one. To the question as what percentage of revenue for the overall segment disposables represent. Over 40%, and as far as margins are concerned, disposables typically have fairly strong margins, particularly where they are dedicated to the equipment like in infusion. George?

George Barrett - Vice Chairman and Chief Executive Officer, Healthcare Supply Chain Services

Yes, Tom it's really a couple of components you asked about the contribution to growth and what's happening. I think it's a little bit of three components. One there is some improvement in capturing a high percent, higher percentage of our existing customers business. The other single business, and I think we've mentioned this in prior quarters that we've been picking up a little business along the way, in spite of some of our challenges in the anti-diversion environment for us.

And then finally, we actually had some more unusual growth in certain segments, in the health systems part of our business in ambulatory. So it's really several components that are contributing to this, and feeling like we're on the right path here.

Tom Gallucci - Merrill Lynch

George, have you had any major discussions with clients that were affected by the DEA issues, and that you're going to be up filing in November, you think any visibility on which of those customers you may win back or not?

George Barrett - Vice Chairman and Chief Executive Officer, Healthcare Supply Chain Services

We've had plenty of conversations. Probably... actually now for some months about the future. It is very difficult to give you a quantitative analysis on what's going to come back to us. I think as I've said before, we're probably going to have to work out in about slowly, but I am optimistic that the things that we've been doing in recent months are signal to them our commitment, and I think it will take time, but I think we're on the right path with them.

 

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