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CARDINAL DISTRIBUTION, INC. REPORTS 27 PERCENT FIRST QUARTER EARNINGS GAIN

 DUBLIN, Ohio, July 21 /PRNewswire/ -- Cardinal Distribution, Inc. (NASDAQ: CDIC) today announced substantially higher sales and earnings for its first quarter ended June 30, 1993.
 For the first quarter of Fiscal 1994, net sales increased by 16 percent to $550 million from $474 million in the comparable prior period. Net earnings increased by 27 percent to $7.8 million from $6.1 million a year ago. Fully diluted earnings per share increased by 23 percent to $.38 in the current year from $.31 last year.
 The earnings results described above reflect comparisons before the cumulative effect of a change in accounting principle associated with Cardinal's adoption of Statement of Financial Accounting Standards 109 "Accounting for Income Taxes" in the first quarter of Fiscal 1994. SFAS 109 changes the company's method of accounting for income taxes from the deferral method to an asset and liability approach. The $10 million cumulative impact of adopting this statement is reported as a change in accounting principle retroactive to April 1, 1992 (the beginning of Cardinal's Fiscal 1993), and has no effect on Cardinal's cash position or Fiscal 1994 earnings.
 Robert D. Walter, chairman and chief executive officer, expressed his strong satisfaction with the first quarter results and confidence in Cardinal's positioning to continue its sales and earnings growth. "Our first quarter results reflect another well-balanced performance in a changing market environment. Internal sales growth (i.e., excluding acquisitions and discontinued businesses) was 13 percent, and reflects our efforts to attain managed growth by striking the proper relationship between expanding market share and prudently managing selling margin objectives. We believe that neither sales growth nor selling margin objectives can properly be considered independent of the other, and that effectively balancing both is crucial to achieving sustainable market success. Cardinal's net earnings as a percentage of sales in the first quarter increased to 1.41 percent compared to 1.30 percent last year, as we continued to realize the benefits of excellent expense control and capacity leverage which more than offset the lower gross margins associated with moderating drug price inflation and competitive market conditions. Asset turn-over continues to show significant improvement, with Cardinal's lower investments in inventory and earlier payments from customers warranting the lower gross margins currently earned."
 Walter continued, that "a key to Cardinal's consistently superior financial performance is its willingness to invest in future growth. Over the last five years, Cardinal has made a significant investment in modernizing and expanding the capacity of its distribution network and customer service technology, and today is poised to leverage additional sales growth over this relatively fixed cost base. Our recent acquisition of Solomons Company, based in Savannah, Georgia, strengthens our newly-expanded market presence in the southeastern United States and provides us with access to new customers as well as the ability to leverage existing customer relationships over new geographic territories. Solomons is already contributing to our overall profitability and is rapidly integrating the additional services and programs Cardinal offers throughout the rest of its distribution network.
 During the first quarter, Cardinal also completed both new supply relationships and contract renewals with major retail chain and hospital groups. These new and expanded relationships, serviced by Cardinal's network of modern, high-capacity distribution facilities and complemented by Cardinal's industry leading AccuNet. and Network. inventory management systems, should further accelerate Cardinal's sales and earnings growth over the next several quarters."
 Walter concluded that "our industry is undergoing fundamental change and consolidation, and this is an environment Cardinal welcomes. We have assembled an experienced management team, capable of coping with a rapidly changing market environment and larger responsibilities. We are an industry leader in implementing specialty distribution services to complement the changing manner in which healthcare manufacturers market new and innovative products to a variety of specialized, managed care providers. This specialty distribution expertise can readily be leveraged as Cardinal continues to expand its business relationships with major customers and manufacturers. With the recent conversion of Cardinal's $75 million of convertible debentures, we have increased our shareholders' equity to over $330 million and have virtually no debt, net of cash. In effect, we have invested in anticipation of the industry consolidation which is now upon us to assure that Cardinal is well-positioned, financially, technologically, and organizationally, to take full advantage of the business growth opportunities now available. I believe this will be an outstanding year for Cardinal, and we are off to a strong start in the first quarter."
 Cardinal Distribution, Inc. supplies pharmaceuticals, medical and surgical supplies, and related health products to drug stores, hospital pharmacies, and other customers located primarily in the eastern United States.
 CARDINAL DISTRIBUTION, INC.
 CONSOLIDATED BALANCE SHEETS
 (In Thousands)
 June 30, March 31,
 1993 1993(A)
 ASSETS
 CURRENT ASSETS
 Cash and Equivalents and
 Marketable Securities $ 133,108 $ 103,941
 Trade Receivables 153,452 143,949
 Merchandise Inventories 312,166 318,708
 Prepaid Expenses & Other 10,734 5,792
 Total Current Assets 609,460 572,390
 PROPERTY AND EQUIPMENT-AT COST 64,450 60,938
 Less Accumulated Depreciation
 and Amortization (23,196) (21,966)
 Property and Equipment-net 41,254 38,972
 OTHER ASSETS 47,854 38,938
 TOTAL $ 698,568 $ 650,300
 LIABILITIES AND SHAREHOLDERS' EQUITY
 CURRENT LIABILITIES
 Current Portion of Long-Term Obligations $ 1,389 $ 3,092
 Accounts Payable 207,008 168,369
 Other Accrued Liabilities 47,731 45,573
 Total Current Liabilities 256,128 217,034
 LONG-TERM OBLIGATIONS, LESS CURRENT PORTION 184,441 185,322
 DEFERRED INCOME TAXES 2,305 2,305
 Common Shares-Without Par Value 170,986 168,153
 Retained Earnings 90,857 83,564
 Common Shares in Treasury, at Cost (3,083) (3,074)
 Unamortized Value of Restricted Stock Issued (3,066) (3,004)
 TOTAL SHAREHOLDERS' EQUITY 255,694 245,639
 TOTAL $ 698,568 $ 650,300
 (A) -- Restated for the impact of the $10 million cumulative effect of adopting SFAS 109 retroactively to April, 1992 (beginning of Fiscal 1993).
 CARDINAL DISTRIBUTION, INC.
 INCOME STATEMENT TRENDS
 (In thousands, except per share data)
 FIRST QUARTER
 June 30, Pct of June 30, Pct of Pct
 1993 Net Sales 1992 Net Sales Change
 Net Sales $ 550,034 100.00 $ 474,324 100.00 16
 Cost of
 Products Sold 517,188 94.03 443,698 93.54 17
 Gross Margin 32,846 5.97 30,626 6.46 7
 S, G & A Expenses (18,076) 3.29 (17,387) 3.67 4
 Operating Earnings 14,770 2.69 13,239 2.79 12
 Other Income (Expense):
 Interest expense (3,406) 0.62 (3,855) 0.81 (12)
 Other, net 971 0.18 689 0.15 41
 Earnings Before
 Income Taxes 12,335 2.24 10,073 2.12 22
 Provision for
 Income Taxes (4,564) 0.83 (3,928) 0.83 16
 Net Earnings Before
 Cumulative Effect of
 Change in Accounting
 Principle 7,771 1.41 6,145 1.30 27
 Cumulative Effect of
 Change in Accounting
 Principle --- -- (10,000) --
 Net Earnings
 (Loss) $ 7,771 1.41 $ (3,855) (0.81)
 Earnings (Loss) Per Share Common Share:
 Primary:
 Net earnings before
 cumulative effect
 of change in
 accounting
 principle $ 0.41 $ 0.33 24
 Cumulative effect
 of change in
 accounting
 principle -- $ (0.53)
 Net earnings
 (loss) $ 0.41 $ (0.20)
 Fully Diluted:
 Net earnings before
 cumulative effect
 of change in
 accounting
 principle $ 0.38 $ 0.31 23
 Cumulative effect
 of change in
 accounting
 principle -- $ (0.51)
 Net earnings
 (loss) $ 0.38 $ (0.20)
 Primary 19,151 18,897
 Fully Diluted 22,728 22,613
 -0- 7/21/93
 /CONTACT: David Bearman, senior vice president, chief financial officer, 614-761-8700; or Stephanie Rohlin Mishra, vice president, Financial Relations Board, 313-643-0202; both for Cardinal Distribution, Inc./
 (CDIC)


CO: Cardinal Distribution, Inc. ST: Ohio IN: MTC SU: ERN

BM -- CL007 -- 3798 07/21/93 09:21 EDT
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