Cardinal Health, Inc. (CAH) Earnings Call Transcript & Summary

Good morning and thank you for joining us. My name is Lisa Gill and I'm the healthcare services analyst with JPMorgan. With us this morning we have Cardinal Health. With us from Cardinal Health is CEO, Mike Kaufmann, as well as CFO, Jason Hollar. With it, I will talk to back to Mike and then will come back for Q&A at the end. Good morning Mike, thanks for joining us.

Good morning, thanks Lisa. I appreciate it and good morning to everybody else joining us today. Before I begin, I want you to know that I will be making some forward-looking statements today, and these forward-looking statements are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected or implied. For a description of these risks and uncertainties, please refer to our Investor Relations website or to our SEC filings. For those of you unfamiliar with Cardinal Health, let me start today's presentation by saying that our aspiration has been and continues to be that we are health care's most trusted partner. We will do this by focusing on our customers' needs and delivering the products and solutions that advance health care and improve the lives of people each and every day. We bring life-changing health care innovation to market, harnessing the power of technology, data and insights to optimize care delivery. We're investing in technology and analytics to drive future growth in evolving areas of healthcare and address healthcare's most complicated challenges. What we do matters. And we're focusing our resources and solutions on the needs of our customers and their patients, now and in the future. Turning to Slide 5. This captures a few high-level essential facts about Cardinal Health. We finished our fiscal 2021 in June with $162 billion in revenue. We have manufacturing operations in 11 countries and combined with our commercial operations, we operate in over 30 countries, and we have approximately 44,000 employees worldwide. On Slide 6, our breadth and scale is significant. We are a leader in healthcare, serving roughly 90% of the hospitals in the United States through our medical or pharmaceutical distribution, our private label products, or our world-class solutions. In addition, every day, we service more than 60,000 U.S. pharmacies through either pharmaceutical distribution or our services such as medication therapy management through our Outcomes business. This includes large retail chains, grocery stores, individual retail independents and hospitals. We serve more than 3.4 million U.S. patients in their homes with more than 46,000 health care products. We operate a network of more than 130 nuclear pharmacies and more than 30 nuclear manufacturing facilities that produce products like FDG, iodine, and pharmaceutical cancer treatments such as Xofigo. And we serve more than 10,000 U.S. specialty physician offices and clinics. Now let me give you a few highlights from the last fiscal year, which ended June 30. In FY '21, we grew revenue 6% versus the prior year. And despite an estimated $200 million year-over-year operating earnings headwind, related to COVID-19, we grew non-GAAP EPS. We continue to aggressively streamline our cost structure, and we surpassed our enterprise cost savings target for the third consecutive year. We once again generated strong operating cash flow, returning approximately $800 million to shareholders through dividends and share repurchases. And we strengthened our balance sheet by paying down approximately $550 million of debt. Throughout the past year, we've been taking action to drive performance across our businesses and to continue to move forward with urgency. To simplify our operating model, we divested the Cordis business and are prioritizing investments in our strategic growth areas. As the pandemic unfolded, we focused on protecting the health and safety of our employees, so they could deliver critical products and services to our customers. We partnered with CDC as a network administrator to enable retail independent, small chain and long-term care pharmacy customers to participate in the vaccination effort. Collectively, to date, our enrolled network of 3,500-plus community pharmacy customers, who participate in the federal retail pharmacy program, have administered more than 8 million doses of COVID-19 vaccines. I'll now turn to our segments on Slide 8. While we always operate and act as one company, we are organized into 2 operating segments: Pharmaceutical and Medical. During our FY '21, our Pharmaceutical segment delivered revenue of $146 billion and $1.7 billion in profit. Our Medical segment generated $16.7 billion in revenue with $577 million of profit. On the next 2 slides, I'll give you a little more color on the offerings and key capabilities of each segment. Our Pharma segment includes Pharmaceutical Distribution, Specialty Solutions, Nuclear and Precision Health Solutions and Outcomes. Our PD business, at its core, distributes branded and generic pharmaceutical and over-the-counter healthcare products. We make both manufacturers and healthcare providers more efficient by providing end-to-end logistics and technology solutions. Our Specialty Solutions business, a critical growth area for us, is aligned with the market trends that we are seeing around the growth of specialty medications. This business has strong offerings, both downstream with providers and upstream with manufacturers. We provide distribution services for branded, generic and biosimilar specialty medications as well as technology offerings for pharmacies and physician offices. We support biopharma manufacturers with 3PL services, data and evidence solutions, commercialization support, regulatory consulting and patient hub services. Our Nuclear business operates the largest radiopharmaceutical network of pharmacies. We manufacture both diagnostic and therapeutic products like FDG and Iodine. We support manufacturers through contract manufacturing and drug development. And finally, our Outcomes business offers a digital ecosystem that connects pharmacists, payors and pharmaceutical companies to mitigate the challenges of medication nonadherence and close critical gaps in health care. Slide 10 describes our Medical segment, which is comprised of a national lab and medical products distribution business, solutions provider, and is also a leading manufacturer of high-quality medical products. We manufacture, source and distribute private label medical, surgical and laboratory products. These products are sold as Cardinal Health brand, but also as well as other well-known brands like Kendall, Monoject, ProCuity and Kangaroo. These products range from consumable products like gloves and gowns to higher-end medical devices such as enteral feeding and compression. We also support hospitals, ambulatory surgery centers, clinical laboratories and other health care provider customers by distributing a broad range of national branded products. In addition, we provide data-driven supply chain solutions, including OptiFreight, which helps our customers manage their freight cost and WaveMark, which leverages RFID technology to ensure supply chain integrity and reduce waste. Lastly, our at-Home Solutions business delivers products and solutions to serve patients directly in their home. Within the medical products and distribution portion of the Medical segment, we've experienced headwinds from product and raw material shortages, increased supply chain costs and fluctuating demand from hospitals. We're taking action to mitigate these elevated costs and manage through the temporary supply chain disruptions, including pricing adjustments, cutting additional costs throughout the organization and accelerating additional growth opportunities. As we noted in a press release this morning, however, these negative impacts are now expected to be greater than we previously expected. Looking ahead, we are resolute in our commitment to mitigate these impacts and drive efficiencies, so we can better serve our customers. At an enterprise level, we continue to focus on our efforts on 3 strategic priorities: optimizing our core businesses, investing for growth and innovation, and deploying capital efficiently. We have been on a journey to simplify our portfolio and strengthen our core businesses. So we are positioned for broad-based sustainable growth as evidenced in the long-term targets we recently announced and continue to believe are achievable. We are prioritizing investments in our strategic growth areas and in innovative solutions to meet our customers' needs today and tomorrow. And with our improved balance sheet, commitment to our dividend and an additional $3 billion in share repurchase authorization, we are well positioned to return capital to shareholders. I'll now go a little bit deeper on each strategic priority area. We are continually reviewing our business and seeking areas to improve as we navigate the dynamic macroeconomic environment. That work continues at the enterprise level and in both of our segments, as described on Slide 12. Across the enterprise, we've increased our cost savings target by $250 million to $750 million in total by FY '23. At the same time, we continue to invest in technology enhancements to drive future growth and efficiencies. In Medical, as previously mentioned, we are simplifying our operating model. We divested the Cordis business and have begun significantly reducing our international commercial footprint. We have announced and are in the process of exiting 36 initial markets, which will allow us to focus on the markets in which we have a competitive advantage. Additionally, we are further streamlining our medical manufacturing footprint and modernizing our distribution facilities. In addition, we are implementing important changes to our global supply chain capabilities, making significant investments in our infrastructure, working to change our commercial contracting strategies and driving our growth businesses. We see meaningful growth opportunities as we make these improvements and the supply chain normalizes. We are also focused on driving mix through commercial excellence. Our Cardinal Health brand portfolio has significant breadth, with leading brands, as I mentioned, and clinically differentiated products, and we are underpenetrated in Cardinal Health brand mix, relative to our potential. An increase in private label penetration across our U.S. and in-channel customer base represents a significant profit opportunity with even further opportunities out of channel and internationally. As we move past the pandemic, we see this as a significant opportunity to both deliver savings for our customers and grow our business over the mid to long term as customers transition from managing through the pandemic. Turning to pharma. We're focused on 3 things to strengthen our core PD. First, we continue to support our diverse customer base. Over 50 years, we've honed our distribution expertise and developed a strong customer base across multiple classes of trade with leaders in chain pharmacy, direct mail order, grocery and retail independent customers. Second, we're focusing on maximizing our generics program. Our generics program is anchored by the scale and expertise of Red Oak Sourcing, a partnership we recently extended through our fiscal year '29. Overall, we continue to see generally consistent market dynamics in our generic program. Third, we have invested significantly in our technology to enhance the customer experience and drive efficiencies. We are approaching the end of a multiyear investment journey to modernize our IT infrastructure, which will yield meaningful working capital improvements and operational efficiencies. Now let's turn to Slide 13. We're excited by the trends in healthcare that are improving patient care and driving value for the system. We see several particularly impactful to our business, including some of our key growth areas. First, in Specialty distribution, with the rate of scientific innovation is unlike ever before. These therapies are novel and require creative logistics enhanced with technology that allows providers, patients and manufacturers to have visibility to the supply chain. We do this well. Second, site of care shifts. No question care is shifting to the home as well as other nontraditional sites like ambulatory surgery centers. These shifts drive value for patients and the system. We are proud of our work to enable these changes and are dedicated to continuing to find creative solutions and form industry partnerships that support these shifts. Third, there has been great advancements to supply chain technology that will only continue. COVID-19 showed how critical robust healthcare supply chains are to the functioning of our system and we've continuously explored innovative ways to track and deliver life-saving drugs and medical products. For example, we announced a partnership with FourKites, the largest predictive supply chain visibility platform, to create a cognitive supply chain network that combines real-time visibility, machine learning and artificial intelligence to facilitate the flow of inventory through the supply chain. The last trend to highlight is consumerism. Patients are consumers, who now apply their high expectations for other industries to healthcare, creating an exciting opportunity and a forcing mechanism to change. As it becomes more important than ever for our customers to meet patients where they are and provide healthcare options that fit consumers and customers' existing routines, we will be there to support them with technology, data, products and services. Now to our growth businesses. Our strategic growth businesses all offer complementary capabilities to our core businesses, margin accretive opportunities and are aligned with the industry trends that I just highlighted. We expect these businesses to collectively realize double-digit growth in FY '22. Slide 15 details how we're investing to drive profitability and innovation across our 5 growth businesses. We continue to invest in technology enhancements and innovative solutions that give our businesses a competitive edge. In Specialty, we're launching new provider solutions, continuing to generate commercial momentum in upstream services and positioning our businesses to support the next phase of biosimilar growth as adoption increases in areas outside of oncology. In at-Home, which is now a $2.2 billion business, we're making significant investments in digital and technology capabilities and expanding our warehouse network to support the strong demand that we are seeing. Our Nuclear business is positioned to double its profits by FY '26, driven by investments in theranostics, expansion of PET capabilities, and partnerships that support radiopharmaceutical innovation. Our Medical Services businesses, OptiFreight and WaveMark are implementing tech-enabled capabilities to digitally automate parts of the health care supply chain and increase their suite of offerings. And in Outcomes, we're adding new payers and PBMs, expanding clinical solutions for retail chains and independent pharmacies, and we're implementing new patient adherence programs. We continue to deploy capital according to our priorities. In FY '22, we're investing $400 million to $450 million back into the business in CapEx, to drive organic growth, strengthening our balance sheet through approximately $850 million in total debt paydown, of which approximately $570 million was completed in the first quarter, and we're returning cash to shareholders through dividends and share repurchases. Our Board recently approved a new 3-year authorization to repurchase up to additional $3 billion of our common stock, expiring at the end of calendar year 2024. We expect approximately $1 billion of share repurchases in FY '22, which includes the $500 million of share repurchases executed as of Q1 earnings, and we initiated $300 million more in Q2. These priorities are enabled by our continued strong cash flow. Slide 16 -- 17, outlines the long-term financial targets we announced a few months ago. We remain committed and excited about these targets and we believe the actions we're taking to grow profits in both Pharma and Medical, coupled with our commitment to our dividend, and our new $3 billion share repurchase authorization, will result in double-digit combined EPS growth and dividend yield on average. We've also established long-term targets for our ESG initiatives. Those are depicted on Slide 18. These priorities remain critical to achieving a healthier, more sustainable world. We are targeting reducing Scope 1 and Scope 2 greenhouse gas emissions by 50% by 2030 and increasing minority representation in our global workforce. So, you've heard me talk about our business and where we're focusing. Let me sum it up with why I'm excited about Cardinal Health's future and why I believe we're a compelling investment opportunity. First, our company is positioned to benefit from favorable healthcare trends, such as general patient demographics like an aging baby-boomer population that will require increased care or the shifts in patient and provider preferences such as for more care and services in the home. As a leader in consolidated industries, we operate with tremendous scale and efficiencies, lowering the cost of care for our customers and providing valued solutions. Our differentiated portfolio of growth businesses across Pharma and Medical are aligned with industry trends, positioned to grow double digits and are becoming a bigger contributor to our company's performance. We continue to operate with urgency and have a strong pipeline of initiatives to take cost out of our business. Our Pharma Distribution business continues to see stability, evidenced by the growth we expect in FY '22. And while performance in Medical Products and Distribution has been challenged throughout the pandemic, we have confidence in our plans and actions that I discussed to drive medical performance. Overall, our business models continue to generate robust operating cash flow. We are focused on allocating capital in a balanced, disciplined and shareholder-friendly manner, which includes our commitment to our dividend and our new $3 billion share repurchase program. So, as we deploy capital and our performance improves in line with our recently established long-term targets, we believe that our current valuation will prove compelling. In closing, what we do matters. And it is our privilege to serve our customers, their patients and their communities around the world. In a time of unprecedented change, we're focused on long-term growth. We're confronting today's challenges and developing tomorrow's solutions with tenacity, agility and innovation that makes Cardinal Health essential to care. Lisa, I'll now turn it back to you to begin the Q&A. In the meantime, I'm going to ask Jason Hollar, our CFO, to join me.

Thank you so much, Mike, for the comments. And welcome to Jason. Nice to see you again. Mike, let's just start with the press release that you put out today. You talked about the supply chain challenges in the med-surg division. Can you talk about how that compares to what you were seeing the last time we spoke, which was around earnings in November?

Thanks for the question, Lisa. So if you think back to November, what we were seeing at the time was significant increases, inflationary increases in international freight in certain commodities. And we said at the time that, that would be a headwind of about $100 million to $125 million, and we took down Medical guidance, but we maintained guidance for the entire company, because we had initiatives that we were putting in place to offset that initial challenges. What we've seen since November is an additional, right now, we're estimating to be $150 million to $175 million of impact in the Medical segment or $0.40 to $0.45. And we really are seeing this in 3 areas. First of all, we're seeing some additional inflationary impacts. We're seeing it be a lot more broad-based than just international freight and commodities. We're seeing additional commodities. We're seeing domestic freight be -- significant increases there. So the first bucket, I would say, higher-than-expected inflation across more areas, and we're expecting it to extend longer than we originally estimated for this year. The second thing is we're seeing lower volumes. And what I mean by that is we're not really seeing -- we're seeing some lost sales, not from necessarily lost customers, but lost sales in key product categories due to some of the global supply constraints. And then lastly, we had anticipated that a certain amount of pricing that we could take to market. And we have seen the ability to take price to market, but it's not as significant as we previously planned, and we think it's going to take a little longer than we expected to get it to market. So those are the categories. It's really important that we really do believe these are -- the vast majorities are temporary that these will flush through the system, and we continue to work on our commercial contracting strategies and other initiatives to drive to get our performance where we expect it to be.

And how much of this do you think is a Cardinal issue versus an industry issue? You have one other publicly traded competitor. I know they're not a one for one but have done really well within [PP&E], have done really well with government contracts. So how do we think about comparing, "Hey, these are Cardinal problems, Cardinal is going to fix them? Or these are industry problems, it's going to take time for these things to evolve from an industry perspective."

Yes. Great question. It's -- I won't get into specifics around each one of the competitors, but a couple of things to keep in mind. Obviously, the more global your supply chain is, the more you're bringing, particularly from Asia and all that, then you're going to see more impact from the international freight component. The more you manufacture with the certain commodities, like we're a manufacturer of syringes and other products that maybe that others aren't. And as we see certain categories of commodities going up, we're going to see challenges in those. So it's really hard because we're all very different. There's nothing about the challenges that we're seeing that I think are different than what others are seeing. It's just how much impact it has on each one of our particular P&Ls based on where we source, where we manufacture, the products we manufacture, because when it happens on a branded product, those are automatically passed through. But when you have a larger product portfolio like we do, then those are a little bit more challenging. And so again, that's probably the best way I would see it talking about that.

And then just kind of sticking to the Medical segment for a minute here. The results have been mixed, right? And I think I was pretty vocal about the fact that I didn't love the Cordis acquisition, and I did applaud you for divesting the Cordis acquisition. But what are the other steps, number one, that you need to take to really truly stabilize this business? Two, are there other divestitures that need to be made? And then thirdly, you talked about today in your presentation, the underpenetration of Cardinal brand products, which generally would drive much higher margins than other products. Is that where there's a real opportunity? And how do you drive that penetration?

Yes. I'll start here, and there may be a few things Jason may want to add. But let me first start to make sure that everyone understands that these challenges are very specific to our Medical Products and Distribution business. As we take apart the Medical business, and let's look at our growth businesses first, we continue to be incredibly excited about our at-Home business. We see it's very aligned with where the market is going, more and more care is going to the home. And in fact, this morning, you might have saw the press release that we made an incremental investment, and we're one of the lead investors in increasing our investment in medically home. And so this is a company we have a lot of respect for and are invested in. So we continue to see and we'll capitalize opportunities going at-Home, and we continue to see ourselves growing faster than market in that space. So we feel really good about that one. Our Services business in Medical, both OptiFreight and WaveMark, both of those continue to see strong growth. They're not only performing well with their current offerings, but with some of the technology investments we've made over the last couple of years, they're both expanding their customer base and offerings. So we feel really good about the 3 growth businesses. In addition, you've heard us talk some about our lab business. And this lab business was growing prior to COVID, and it continues to actually grow nicely during COVID. It's seeing some upticks from COVID, but we feel really good about how it's competing in the marketplace in the way it's winning and retaining share. So we feel really good about those. It really is focused on our Medical Products and Distribution businesses where our challenges are. So besides growing our growth businesses, which is one of our key initiatives in Medical, there's probably 2 additional things we're doing specifically to get after what's going on in Medical Products and Distribution. One, you kind of mentioned, I'll put it in a broad bucket of evolving our commercial contracting strategies and driving mix. We see a real opportunity to continue to drive our mix. We changed a lot of our incentive programs with our reps, as we talked about for, and as supply gets better and better, and we're working through those types of things related to COVID, we see some real opportunities around driving mix within our current accounts. Second of all, around changing our commercial contracting strategies. This has been an industry that costs have been relatively stable. They've generally been consistent or coming down over a period of time. And so the industry historically has been very comfortable with putting longer-term contracts out there, 2, 3, 4-year contracts for products. And as we've seen -- with the dramatic inflation we've seen in a very short period of time, that contracting strategy needs to change. And so we are in the process of working with our customers to understand and adjust this contracting, so that in the future, we have more flexibility with them and our ability to price in these types of unique situations. So that's really important. And then you also mentioned the other thing we're doing in the segment besides evolving our commercial contracting strategies and driving mix, which is simplifying our operating model. Cordis, I agree with you, was not the right fit. It complicated our structure. We were in way too many markets internationally where we weren't making any real profit. So we exited some very initially when I took over as CEO. We did a further evaluation. We got out of another 36 initial markets. And what we're actually seeing is we feel really good about our footprint now internationally to be able to grow with the products and services that we have. And then the last thing I would say is tied to the operating model is our manufacturing footprint. We are continuing to evaluate that. We've made significant adjustments already. We have increased our internal capability, for instance, to produce mask and gowns. We've near-shored a lot more, because we're not seeing challenges so much in the supply chain when we're in Costa Rica, Mexico, Dominican or in the United States, some costs, but not like it is internationally. And so we're continuing to geographically change our overall manufacturing footprint.

Mike, you talked about the domestic freight pressures here in the U.S., primarily in your Medical business. But how do I think about that on the Pharma side? My understanding is that a lot of those costs are able to be passed through. Is it just the case that that's not the case on the Medical side? Or do I not understand it correctly on the pharmaceutical side?

Well, think about it in 2 shape and forms. The Medical segment freight costs are driven by the fact that when you're shipping, you're shipping semi-truck loads of product. It's much more bulky, it's much bigger. And so you are shipping in lots of, again, bulky product, a lot of truckloads versus the pharmaceutical business has some straight runs maybe to certain spots, but then it's split out into much smaller shipment. And so the amount of freight that you have in Medical is just far significantly more in total than it is to Pharma. We are seeing increases in U.S. freight in the Pharmaceutical business, but with all the expense initiatives and stuff we're driving, we've been able to get after those in that business. But comparatively, just because of the breadth and scale and size of the Medical business, that's where we're seeing a lot more impact from domestic freight.

And then the other inflationary impacts are also overweighted towards the Medical business. When you think about the commodities, it's polypropylene, right? That's obviously very specific to a lot of the Medical products that we just don't have that type of inflationary pressures within the actual product of the Pharma.

And can we talk a minute -- I mean, you spent a lot of time talking about your Medical business, a little bit of time talking about your pharmacy business. But when we think about the Pharmaceutical Distribution side of the business, just a couple of questions. One, Cough, Cold, Flu has always been kind of an important category, right, for drug distributors. And last year, we had done with incidents were down 94%. How do we think about that this year, number one? And number two, how do we think about some of the new antiviral for COVID coming to the marketplace? It's anticipated, right, that it will go through the pharmacy. I mean who knows exactly, but could that be a real category for a drug distributor?

Yes, a couple of things. First of all, back in November that -- we did say we were continuing to see some broad-based sequential improvement in our expected recovery, the pre-pandemic levels for the pharmaceuticals. We continue to see that. So other than a few items here and there that are still a little bit off, overall, pharmaceutical volumes are at or near pre-COVID level, specifically to cold and flu. You're right, last year was essentially 0, so you're going against a base. We are seeing some uptick in flu. We are distributing flu vaccines this year. We are seeing a little bit, not as significant as some prior years, we are seeing some uptick in cough and cold, and flu. And to your last question, we -- even some industry experts have recently come out and said that their belief is that it will be more cost effective. It will be -- you'll be able to get -- reach a broader base of customers and consumers by going through the overall supply chain. So we continue to be a proponent of all the vaccines and antivirals going through the normal supply chain. That's what the customers prefer. We hear it loud and clear from them. They are communicating to both the suppliers and others that that's the way they prefer it. So I do believe that this is an area that makes the most sense. The timing is hard to project when that will happen, but I do think that will eventually happen.

And I have 2 last questions, and we only have 3 minutes left here. And I know this one is a tough one, okay? But when I think about negative earnings revisions for the 3 players in the marketplace, clearly, Cardinal's had a lot more than the other 2. I know your Medical business is different than theirs, right? You have commodity and other issues. How can investors feel confident in your outlook going forward? And what are some of the things that perhaps you could do on your side to maybe have a little bit better visibility or give us maybe a little bit better guidance, so that we don't have another negative announcement at some point in 2022?

Yes, it's a fair comment, Lisa. We get it. We don't like these type of announcements any more than any of you do. We want to be as transparent and honest and forthright as possible, which is why we want to come forward here, but I'd say a couple of things. First of all, we're a very broad business. We have a lot of areas, not only Medical and Pharma, but within each one of those, there's a lot of different businesses. We're continuing to see those businesses be at or on or very close to plan, some little better, some very close, et cetera. So when you think about Pharma, we're still expecting the growth. We've not changed any of our expectations there. When we continue to either on the components or in total, our overall balance sheet objectives and stuff we put out, those types of things around cash flow and all that, those types of things are tracking, et cetera. The Medical business, as I said, the growth businesses, lab, all those are performing. It's really one specific area for us is that. And so to look at our entire business, I think in general, we absolutely have a good handle and feel really good about where we are to project that. These significant inflationary impacts are just really hard to predict. Who would have thought, we couldn't think a container that we were paying $2,500 a container on 6, 8, 9 months ago or whatever it was, is now $22,000. Those types of numbers. To see some of the shortages from our domestic freight supplier to find drivers to be able to get freight moved around and some of the challenges that, that creates in some of the commodities. So what I would remind folks is that it's very specific to one piece of a very large company that we are on top of it. We're focused on growing the business, simplifying mix. We know the things we need to do. We're aggressive on our cost initiatives in Medical, et cetera, and that we'll utilize our balance sheet to continue to deliver a strong dividend and share repurchases.

Well, thank you so much. I know we're out of time, but I really appreciate all the comments today. I appreciate your honesty and everything that we talked about. I know it's been a tough day but thank you so much to the Cardinal Health team. If you have any questions, feel free to reach out to me or anyone on my team or to Kevin Moran at Cardinal . Thanks so much, Mike and Jason. See you guys soon.

All right. Take care.

Thank you.

Bye-bye.