Leaders from Cardinal Health (NYSE: CAH) continue to emphasize the company’s strategic focus on its at-Home Solutions and OptiFreight logistics businesses.
CFO Aaron Alt detailed the growth potential and ongoing investments in these areas during an investor conference Wednesday.
“We are excited about the opportunities we have across our portfolio,” Alt said. “We are particularly excited about some of the opportunities we have in what is now called our ‘Other’ [segment].”
The Dublin, Ohio-based Cardinal Health is among the largest of all U.S. health-care companies, bringing in $54.9 billion in fiscal third quarter revenues. While Cardinal’s pharmaceutical and specialty solutions segment has been the company’s main growth driver, its Other segment has been gaining more attention of late.
Specifically, the Other segment includes Cardinal’s at-Home Solutions and OptiFreight businesses, plus the company’s nuclear and precision health solutions arm.
During Wednesday’s investor conference, Alt once again underscored the significance of Cardinal Health’s at-Home Solutions division, noting the trend toward health-care delivery in the home as the American population ages.
“The at-Home business has been kind of hidden away in our old Med segment as well, but it is on trend from a macro perspective because, of course, health care is now moving increasingly into the home as the American consumer ages,” the CFO explained. “And we have a strong presence across multiple categories there.”
Cardinal is investing in at-Home by doubling down in product categories that are important to the company’s patients. It’s also honing in on product categories that are profitable for Cardinal, Alt said.
“We’re investing, again, in our network,” he continued. “We’ve announced new locations and new distribution nodes in South Carolina, Ohio and, most recently, Texas. And at the same time, given the importance of efficiency, given our overall margin structure, we are investing heavily in technology and automation within that business.”
In addition to at-Home Solutions, Alt spoke about the OptiFreight logistics business, which provides logistics services for hospital, surgery center, pharmacy and laboratory partners, among others.
Currently, there are more than 1,000 customers on the OptiFreight platform, according to Alt.
“They’re looking for value, they’re looking for expertise, and they’re looking for technology,” he said. “We’re an industry leader, and we’re able to [support] them … on how they move items around their own networks, and, indeed, into their network and out of their network. That’s a lesser known part of our portfolio that we’re quite excited about. It’s more of a technology play than a core traditional distribution play, in that way.”
OptiFreight, in particular, has been a consistent performer for Cardinal Health.
“[It’s] a consistent grower across the portfolio, and it’s driven by the broader set of relationships that we have – and the broader expertise that we have,” Alt said.
Looking ahead, Alt reaffirmed Cardinal Health’s commitment to investing in these businesses, emphasizing the importance of transparency and accountability introduced through the company’s recent resegmentation.
“We are allocating resources to those three businesses,” he said. “We were purposeful back in January in announcing a resegmentation of our enterprise to bring transparency, visibility and, importantly, accountability in those businesses. All three now report separately, directly to our CEO. With that reporting comes that visibility and transparency, as well as the commitment to investment in the right
way, at the right time.”
