C. R. Bard, Inc. (NYSE:BCR) today reported 2016 second quarter
financial results. Second quarter 2016 net sales were $931.5
million, an increase of 8 percent over the prior-year period
on an as-reported basis. Excluding the impact of foreign exchange,
second quarter 2016 net sales increased 9 percent over the
prior-year period.
For the second quarter 2016, net sales in the U.S. were $633.1
million, an increase of 7 percent over the prior-year period. Net
sales outside the U.S. were $298.4 million, an increase of 11
percent from the prior-year period on an as-reported basis.
Excluding the impact of foreign exchange, second quarter 2016 net
sales outside the U.S. increased 14 percent over the prior-year
period.
For the second quarter 2016, net income was $159.2 million and
diluted earnings per share were $2.11. Adjusting for amortization
of intangibles and certain items that affect the comparability of
results between periods, as detailed in the tables below, second
quarter 2016 net income was $192.2 million and diluted earnings per
share were $2.54, an increase of 11 percent and 12 percent,
respectively, as compared to second quarter 2015 results.
Timothy M. Ring, chairman and chief executive officer,
commented, “We continue to see strong results as we prioritize
product leadership across the globe. Our commitment to innovation
and product differentiation, along with a focus on delivering
economic benefits to the healthcare system, have driven global
demand for our products, and our targeted investments in emerging
markets continue to expand our presence internationally. We believe
this investment approach positions us well to continue to provide
attractive returns to our shareholders.”
In conjunction with the second quarter results, the company is
also increasing 2016 financial guidance. For the full year 2016,
net sales are forecasted to increase between 7 percent and 8
percent on an as-reported basis. Excluding the impact of foreign
exchange, full year 2016 net sales are forecasted to increase
between 8 percent and 9 percent over 2015. Full year 2016 diluted
earnings per share, after adjusting for amortization of intangibles
and certain items that affect comparability between periods are
projected to be between $10.10 and $10.20, representing growth
between 11 percent and 12 percent compared to full year 2015
results.
C. R. Bard, Inc. (www.crbard.com), headquartered in
Murray Hill, NJ, is a leading multinational developer, manufacturer
and marketer of innovative, life-enhancing medical technologies in
the fields of vascular, urology, oncology and surgical specialty
products.
This press release contains financial measures that are not
calculated in accordance with United States generally accepted
accounting principles (GAAP). These non-GAAP measures are
reconciled to their most directly comparable GAAP measures in the
tables below and related notes.
Non-GAAP measures included in our guidance were not reconciled
to the appropriate GAAP financial measures because the GAAP
measures are not accessible on a forward-looking basis. Items that
impact our non-GAAP financial measures may include
acquisition-related items, asset impairments, litigation charges,
restructuring and productivity initiative costs, tax items and
amortization of certain intangible assets, such as in connection
with future acquisitions. These items cannot all be reasonably
predicted and may directly impact our non-GAAP net income and our
non-GAAP diluted earnings per share, although changes with respect
to certain of these items may offset other changes. In addition,
certain of these items are dependent on various factors.
Accordingly, a reconciliation of the non-GAAP financial measure
guidance to the corresponding GAAP measures is not available
without unreasonable effort.
This press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, which are based on management’s current expectations, the
accuracy of which is necessarily subject to risks and
uncertainties. These statements are not historical in nature and
use words such as “anticipate”, “estimate”, “expect”, “project”,
“intend”, “forecast”, “plan”, “believe”, and other words of similar
meaning in connection with any discussion of future operating or
financial performance. Many factors may cause actual results to
differ materially from anticipated results including product
developments, sales efforts, income tax matters, the outcomes of
contingencies such as legal proceedings, and other economic,
business, competitive and regulatory factors. The company
undertakes no obligation to update its forward-looking statements.
Please refer to the Cautionary Statement Regarding Forward-Looking
Information in our March 31, 2016 Form 10-Q for more detailed
information about these and other factors that may cause actual
results to differ materially from those expressed or implied.
C. R. Bard, Inc.
Consolidated Statements of Operations (dollars and shares in
thousands except per share amounts, unaudited) Quarter Ended
Six Months Ended June 30, June 30,
2016
2015 2016
2015 Net sales $ 931,500 $
859,800 $ 1,805,000 $ 1,679,500 Costs and expenses Cost of goods
sold 351,000 333,700 671,400 644,900 Marketing, selling and
administrative expense 278,500 250,000 549,100 485,700 Research and
development expense 71,300 64,000 139,600 124,600 Interest expense
13,400 11,200 24,700 22,500 Other (income) expense, net
9,600 141,700 69,600
158,000 Total costs and expenses 723,800
800,600 1,454,400
1,435,700 Income from operations before income taxes
207,700 59,200 350,600
243,800 Income tax provision 48,500
113,900 75,200 158,700
Net income (loss) $ 159,200 $ (54,700 ) $ 275,400
$ 85,100 Basic earnings (loss) per share
available to common shareholders $ 2.14 $ (0.74 ) $ 3.70
$ 1.13 Diluted earnings (loss) per share
available to common shareholders $ 2.11 $ (0.74 ) $ 3.64
$ 1.11 Wt. avg. common shares outstanding -
basic 74,000 74,200 74,000 74,300 Wt. avg. common and common
equivalent shares outstanding - diluted 75,200 74,200 75,200 75,700
Product Group Summary of Net Sales (dollars in
thousands, unaudited) Quarter Ended June 30, Six
Months Ended June 30, Constant Constant 2016 2015
Change Currency 2016 2015 Change
Currency Vascular $ 255,300 $ 248,600 3 % 3 % $ 494,800 $ 480,500 3
% 4 % Urology 240,000 209,200 15 % 16 % 456,700 414,800 10 % 11 %
Oncology 252,400 235,200 7 % 8 % 494,300 459,800 8 % 9 % Surgical
Specialties 159,900 143,800 11 % 12 % 311,300 279,700 11 % 12 %
Other 23,900 23,000 4 % 5 % 47,900
44,700 7 % 9 % Net sales $ 931,500 $
859,800 8 % $ 1,805,000 $ 1,679,500 7 %
Foreign exchange impact (5,300 )
(19,600 ) Constant Currency $ 931,500 $ 854,500 9 % $
1,805,000 $ 1,659,900 9 %
Non-GAAP
Reconciliation of Earnings (Loss) (dollars in millions except
per share amounts, unaudited)
Quarter Ended June 30, 2016 Diluted Earnings Marketing, per Share
Cost of Selling and Research & Other Available Goods
Administrative Development (Income) Income Net to Common Sold
Expense Expense Expense, Net Taxes Income Shareholders(1)
GAAP Basis $ 351.0 $ 278.5 $ 71.3 $ 9.6 $ 48.5 $ 159.2 $
2.11 Amortization of intangible assets (32.8 ) - - - 11.1 21.7
Items that affect
comparability of
results between
periods:
Acquisition-related items (1.7 ) (2.0 ) (0.4 ) 0.2 1.6 2.3 Asset
impairment (1.2 ) - - - - 1.2 Restructuring and productivity
initiative costs - - -
(11.9 ) 4.1 7.8 Total
(35.7 ) (2.0 ) (0.4 ) (11.7 ) 16.8 33.0 0.44
Adjusted Basis $ 315.3 $ 276.5
$ 70.9 $ (2.1 ) $ 65.3 $ 192.2 $ 2.54
Quarter Ended June 30, 2015 Diluted (Loss)
Earnings Marketing, per Share Cost of Selling and Research &
Other Available Goods Administrative Development (Income) Income
Net (Loss) to Common Sold Expense Expense Expense, Net Taxes
Income Shareholders(2) GAAP Basis $ 333.7 $ 250.0 $ 64.0 $
141.7 $ 113.9 $ (54.7 ) $ (0.74 ) Amortization of intangible assets
(29.3 ) - - - 9.9 19.4
Items that affect
comparability of
results between
periods:
Acquisition-related items (2.0 ) (1.0 ) (1.5 ) - 0.5 4.0 Litigation
charges, net - - - (343.7 ) 12.5 331.2 Gore proceeds - - - 210.5
(78.8 ) (131.7 ) Restructuring and productivity initiative costs
- - - (8.5 )
3.0 5.5 Total (31.3 ) (1.0 )
(1.5 ) (141.7 ) (52.9 ) 228.4 2.98
Adjusted Basis $ 302.4 $ 249.0 $
62.5 $ - $ 61.0 $ 173.7 $ 2.27
Six Months Ended June 30, 2016 Diluted Earnings
Marketing, per Share Cost of Selling and Research & Other
Available Goods Administrative Development (Income) Income Net to
Common Sold Expense Expense Expense, Net Taxes Income
Shareholders GAAP Basis $ 671.4 $ 549.1 $ 139.6 $ 69.6 $
75.2 $ 275.4 $ 3.64 Amortization of intangible assets (65.2 ) - - -
22.1 43.1
Items that affect
comparability of
results between
periods:
Acquisition-related items 2.6 (6.1 ) (1.9 ) (3.0 ) 4.1 4.3 Asset
impairment (1.2 ) - - - - 1.2 Litigation charges - - - (48.9 ) 18.1
30.8 Restructuring and productivity initiative costs -
- - (21.7 ) 7.3
14.4 Total (63.8 ) (6.1 ) (1.9 ) (73.6
) 51.6 93.8 1.24
Adjusted Basis $ 607.6 $ 543.0 $ 137.7 $ (4.0
) $ 126.8 $ 369.2 $ 4.88 Six
Months Ended June 30, 2015 Diluted Earnings Marketing, per Share
Cost of Selling and Research & Other Available Goods
Administrative Development (Income) Income Net to Common Sold
Expense Expense Expense, Net Taxes Income Shareholders(1)
GAAP Basis $ 644.9 $ 485.7 $ 124.6 $ 158.0 $ 158.7 $ 85.1 $ 1.11
Amortization of intangible assets (58.2 ) - - - 19.6 38.6
Items that affect
comparability of
results between
periods:
Acquisition-related items 7.9 (1.2 ) (1.5 ) (0.5 ) 0.7 (5.4 )
Litigation charges, net - - - (354.0 ) 13.4 340.6 Gore proceeds - -
- 210.5 (78.8 ) (131.7 ) Restructuring and productivity initiative
costs - - - (12.4
) 4.3 8.1 Total (50.3 ) (1.2 )
(1.5 ) (156.4 ) (40.8 ) 250.2 3.26
Adjusted Basis $ 594.6 $ 484.5 $
123.1 $ 1.6 $ 117.9 $ 335.3 $ 4.36
(1) Total per share amounts do not add due to rounding.
(2) For the quarter ended June 30, 2015, diluted loss per share
on a GAAP basis does not include common share equivalents of
approximately 1.3 million. Common share equivalents primarily from
share-based compensation plans were not included in this period
because their effect would have been antidilutive. As a result,
total per share amounts do not add.
Notes to Non-GAAP
Reconciliation of Earnings (Loss)
- For the second quarter 2016,
amortization of intangible assets was $32.8 million pre-tax and the
following items affected the comparability of results between
periods: (i) net charges of $3.9 million pre-tax from
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (ii) a charge of $1.2
million pre-tax related to an asset impairment; and (iii) charges
of $11.9 million pre-tax for restructuring and productivity
initiatives. The net effect of these items decreased net income by
$33.0 million, or $0.44 diluted earnings per share available to
common shareholders.
- For the second quarter 2015,
amortization of intangible assets was $29.3 million pre-tax and the
following items affected the comparability of results between
periods: (i) charges of $4.5 million pre-tax for
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (ii) charges of
$343.7 million pre-tax related to estimated costs for product
liability matters, net of recoveries, which includes $6.8 million
of litigation-related defense costs in connection with the District
Court’s pre-trial orders that the company prepare 500 individual
cases for trial (the “WHP Pre-Trial Orders”); (iii) a gain of
$210.5 million pre-tax related to a patent infringement litigation
against W.L. Gore & Associates, Inc. (“Gore”); and (iv) charges
of $8.5 million pre-tax for restructuring and productivity
initiatives. The net effect of these items increased net loss by
$228.4 million, or $2.98 diluted loss per share available to common
shareholders.
- For the six months ended June 30, 2016,
amortization of intangible assets was $65.2 million pre-tax and the
following items affected the comparability of results between
periods: (i) net charges of $8.4 million pre-tax from
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (ii) a charge of $1.2
million pre-tax related to an asset impairment; (iii) a charge of
$48.9 million pre-tax related to estimated cost for product
liability matters; and (iv) charges of $21.7 million pre-tax for
restructuring and productivity initiatives. The net effect of these
items decreased net income by $93.8 million, or $1.24 diluted
earnings per share available to common shareholders.
- For the six months ended June 30, 2015,
amortization of intangible assets was $58.2 million pre-tax and the
following items affected the comparability of results between
periods: (i) a net benefit of $4.7 million pre-tax for
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (ii) charges of
$354.0 million pre-tax related to estimated costs for product
liability matters, net of recoveries, which includes $15.1 million
of litigation-related defense costs in connection with the WHP
Pre-Trial Orders and other litigation-related charges; (iii) a gain
of $210.5 million pre-tax related to a patent infringement
litigation against Gore; and (iv) charges of $12.4 million pre-tax
for restructuring and productivity initiatives. The net effect of
these items decreased net income by $250.2 million, or $3.26
diluted earnings per share available to common shareholders.
------------------------------------------------------------------------
This press release includes net sales excluding the impact of
foreign exchange. The company analyzes net sales on a constant
currency basis to better measure the comparability of results
between periods. Because changes in foreign currency exchange rates
have a non-operating impact on net sales, the company believes that
evaluating growth in net sales on a constant currency basis
provides an additional and meaningful assessment of net sales to
both management and the company’s investors.
In addition, this press release includes the following non-GAAP
measures: (1) cost of goods sold excluding the amortization of
intangible assets, the impact of acquisition-related items and an
asset impairment; (2) marketing, selling and administrative expense
excluding the impact of acquisition-related items; (3) research and
development expense excluding the impact of acquisition-related
items; (4) other (income) expense, net, excluding
acquisition-related items, litigation charges (which includes
litigation-related defense costs in connection with the WHP
Pre-Trial Orders) and other litigation-related matters, Gore
proceeds, and restructuring and productivity initiative costs; (5)
income tax provision excluding the tax effect of the items set
forth in (1) through (4) above; and (6) net income excluding the
items set forth in (1) through (5) above.
The company excluded the items described above because they may
cause certain statements of operations categories not to be
indicative of ongoing operating results, and therefore affect the
comparability of results between periods. The company therefore
believes that these non-GAAP measures provide an additional and
meaningful assessment of the company’s ongoing operating
performance. Because the company has historically reported non-GAAP
results to the investment community, management also believes that
the inclusion of these non-GAAP measures provides consistency in
its financial reporting and facilitates investors’ understanding of
the company’s historic operating trends by providing an additional
basis for comparisons to prior periods. Management uses these
non-GAAP measures: (1) to establish financial and operational
goals; (2) to monitor the company’s actual performance in relation
to its business plan and operating budgets; (3) to evaluate the
company’s core operating performance and understand key trends
within the business; and (4) as part of several components it
considers in determining incentive compensation.
Management recognizes that the use of these non-GAAP measures
has limitations, including the fact that they may not be comparable
with similar non-GAAP measures used by other companies and that
management must exercise judgment in determining which types of
charges or other items should be excluded from the non-GAAP
information. Management compensates for these limitations by
providing full disclosure of each non-GAAP measure and a
reconciliation to the most directly comparable GAAP measure. All
non-GAAP measures are intended to supplement the applicable GAAP
disclosures and should not be considered in isolation from, or as a
replacement for, financial information prepared in accordance with
GAAP. For a reconciliation of these non-GAAP measures to the most
comparable GAAP measures, please see the above tables.
Notes to Non-GAAP Reconciliation of
Earnings (Loss) per Share
(dollars and shares in thousands, except per share amounts,
unaudited) Quarter Ended Six Months Ended June 30,
June 30, 2016 2015 2016 2015 Earnings (loss)
per Share Numerator: GAAP Basis - basic and diluted Net income
(loss) $ 159,200 $ (54,700 ) $ 275,400 $ 85,100 Less: Income
allocated to participating securities (1) 800 -
1,400 1,200 Net income (loss) available to
common shareholders $ 158,400 $ (54,700 ) $ 274,000 $ 83,900
Earnings per Share Numerator: Adjusted Earnings Net income $
192,200 $ 173,700 $ 369,200 $ 335,300 Less: Income allocated to
participating securities (1) 1,000 2,600
1,900 5,000 Net income available to common
shareholders $ 191,200 $ 171,100 $ 367,300 $ 330,300
Earnings per Share Denominator: Wt. avg. common shares outstanding
- basic 74,000 74,200 74,000 74,300 Wt avg. common and common
equivalent shares outstanding (2): GAAP Basis - diluted 75,200
74,200 75,200 75,700 Wt. avg. common and common equivalent shares
outstanding: Adjusted Basis - diluted 75,200 75,500 75,200 75,700
Earnings (loss) per Share: GAAP Basis Basic earnings (loss)
per share available to common shareholders $ 2.14 $ (0.74 ) $ 3.70
$ 1.13 Diluted earnings (loss) per share available to common
shareholders $ 2.11 $ (0.74 ) $ 3.64 $ 1.11 Earnings per
Share: Adjusted Earnings Diluted earnings per share available to
common shareholders $ 2.54 $ 2.27 $ 4.88 $ 4.36
(1) Basic and diluted earnings per share available to common
shareholders is calculated using a numerator, which represents the
total of income less income allocated to participating
securities.
(2) For the quarter ended June 30, 2015, diluted loss per share
on a GAAP basis does not include common share equivalents of
approximately 1.3 million. Common share equivalents primarily from
share-based compensation plans were not included in this period
because their effect would have been antidilutive.
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version on businesswire.com: http://www.businesswire.com/news/home/20160726006406/en/
C. R. Bard, Inc.Investor Relations:Todd W.
Garner, 908-277-8065Vice President, Investor
RelationsorMedia Relations:Scott T. Lowry,
908-277-8365Vice President and Treasurer
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