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CareFusion Management Discusses Q4 2012 Results - Earnings Call Transcript

Turning to our businesses. We saw a similar trend in the fourth quarter, as in the prior quarters this year. In Medical Systems, our Dispensing business finished a great year by growing revenue 10% and exiting the year with a healthy level of committed contracts that we'll install in fiscal '13.

Infusion grew slightly ahead of our expectations in the quarter to finish a record year. We also continue to see the impact of higher margin consumables pulling through our larger installed base of infusion pumps. This was a contributing factor in our corporate gross margins, moving about 0.5 point higher than in Q2 and Q3.

In Respiratory Technologies, we grew the business nearly 30% in the fourth quarter. About half this growth came from the government contract we told you about last quarter. The other half, coming from organic growth in our core accounts, we feel good about the progress we continue to make in the business.

We're doing a much better job of executing and leveraging the strengths we have across CareFusion for the benefit of our customers. We're also benefiting from our recovery and ventilator sales 2 years after hospital stockpiled for H1N1 preparedness.

In addition to the financial results, the Medical Systems team made good progress hitting internal milestones for our next-generation product platforms and realigning our service organization and in continuing to develop offerings that leverage our strengths across the product portfolio.

Increasingly, we see these cross-business line offerings as key to our growth. We add more value for customers and differentiate CareFusion when we go to market with our medication management and critical care offerings, which cross multiple product lines within Medical Systems.

Our Procedural Solutions segment revenue declined 7% in the fourth quarter, completing a challenging transition year. Adjusted segment profit declined 35% to $32 million, due in large part to the strong Q4 of last year when we had a higher distributor sales in advance of our business model transition. Procedural Solutions exits this year stronger and better positioned with much accomplished and work still to complete in fiscal '13.

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