-
Revenue of $7.2 Billion
Decreased 1% as Reported; Prior Year Had Extra Selling
Week
-
Revenue Increased Greater
than 5 Percent on a Constant Currency, Constant Weeks
Basis
-
GAAP Diluted EPS of $0.66;
Non-GAAP Diluted EPS of $1.03
-
GAAP Cash Flow from
Operations of $1.6 Billion; Free Cash Flow of $1.2
Billion
-
Company Reiterates FY17
Revenue Outlook and EPS Guidance
DUBLIN - August 25, 2016 -
Medtronic plc (NYSE: MDT) today announced financial results for its
first quarter of fiscal year 2017, which ended July 29, 2016.
The company reported first quarter worldwide
revenue of $7.166 billion, a decrease of 1 percent, or an increase
greater than 5 percent on a constant currency, constant weeks
(CCCW) basis. Foreign currency translation had a negative $7
million impact on revenue. The first quarter of fiscal year
2017 contained 13 weeks, one less week than the first quarter of
fiscal year 2016. The extra week occurs every six years as a
result of the company's 52-53 week fiscal year calendar. While
it is difficult to calculate an exact impact from the extra week,
the company estimates that it resulted in an approximate $450
million benefit to revenue and $0.08 to $0.10 benefit to non-GAAP
diluted earnings per share (EPS) in the first quarter of the prior
fiscal year.
First quarter GAAP net income and diluted EPS were
$929 million and $0.66, increases of 13 percent and 16 percent,
respectively. As detailed in the financial schedules included
through the link at the end of this release, first quarter non-GAAP
net income and diluted EPS were $1.444 billion and $1.03,
representing increases of approximately 11 to 14 percent and
approximately 14 to 16 percent, respectively, on a CCCW basis.
U.S. revenue of $4.002 billion represented 56
percent of company revenue and decreased 3 percent, or increased in
the low-single digits on a constant weeks basis. Non-U.S.
developed market revenue of $2.231 billion represented 31 percent
of company revenue and increased 2 percent, or increased in the
mid-single digits on a CCCW basis. Emerging market revenue of
$933 million represented 13 percent of company revenue and was
flat, or increased in the low-double digits on a CCCW basis.
"Q1 was another strong quarter for Medtronic,
where our diversified businesses and geographies delivered solid
results," said Omar Ishrak, Medtronic chairman and chief executive
officer. "In addition to our solid top- and bottom-line
performance, we also continue to generate significant free cash
flow, and we continue to strategically deploy our capital against
our priorities of reinvesting with discipline in M&A and
R&D, returning substantial cash to our shareholders, and
deleveraging our balance sheet."
Cardiac and Vascular
Group
The Cardiac and Vascular Group (CVG) includes the Cardiac Rhythm
& Heart Failure (CRHF), Coronary & Structural Heart (CSH),
and Aortic & Peripheral Vascular (APV) divisions. CVG
worldwide revenue of $2.518 billion decreased 2 percent, or
increased in the mid-single digits on a CCCW basis, driven by
strong, balanced growth across all three divisions.
-
CRHF revenue of $1.334 billion decreased 3
percent, or increased in the mid-single digits on a CCCW
basis. The division outperformed the market in core
implantables on the strength of the Amplia MRI(TM) and Compia
MRI(TM) Quad CRT-D, Evera MRI® ICD, and
Micra® TPS
pacemaker. AF Solutions grew in the mid-thirties on a CCCW basis on
the strength of the Arctic Front Advance® cryoballoon
and recent FIRE AND ICE clinical data. The Diagnostics
business also had a solid quarter, growing in the low-double digits
on a CCCW basis, on the continued global adoption of the Reveal
LINQ® insertable
cardiac monitor.
-
CSH revenue of $762 million decreased 3 percent,
or increased in the mid-single digits on a CCCW basis, driven by
high-twenties growth on a CCCW basis in transcatheter aortic heart
valves as a result of strong customer adoption of the
CoreValve®
Evolut® R. Coronary
declined in the mid-single digits on a CCCW basis, but drug-eluting
stents grew in the mid-single digits on a CCCW basis in markets
outside the United States driven by Resolute Onyx(TM) in Europe and
emerging markets.
-
APV revenue of $422 million increased 2 percent,
or increased in the high-single digits on a CCCW basis, with
high-single digit growth on a CCCW basis in the Aortic business,
driven by the continued strength of the Endurant® IIs
aortic stent graft, the Heli-FX®
EndoAnchor® System, and
Valiant®
Captivia® thoracic
stent graft. The Peripheral Vascular business grew in the
high-single digits on a CCCW basis, with strong above-market growth
in drug-coated balloons, driven by the clinically differentiated
IN.PACT®
Admiral® DCB, which
holds the leading market position in the U.S. and globally.
Minimally Invasive Therapies
Group
The Minimally Invasive Therapies Group (MITG) includes the Surgical
Solutions and the Patient Monitoring & Recovery (PMR)
divisions. MITG worldwide revenue of $2.424 billion decreased
1 percent, or increased in the mid-single digits on a CCCW basis,
another strong quarter for the group with above market growth.
-
Surgical Solutions revenue of $1.348 billion was
flat, or increased in the mid-single digits on a CCCW basis, driven
by high-single digit growth on a CCCW basis in Advanced Stapling
and mid-single digit growth on a CCCW basis in Advanced Energy.
Early Technologies grew in the high-single digits on a CCCW basis,
led by strong growth in GI Solutions.
-
PMR revenue of $1.076 billion decreased 3
percent, or increased in the mid-single digits on a CCCW basis,
driven by growth in Renal Care Solutions from the recent
acquisition of Bellco. The division also returned to market
with the Puritan Bennett(TM) 980 ventilator and Capnostream(TM) 20
capnography monitor, which had previously been under shipping
holds.
Restorative Therapies
Group
The Restorative Therapies Group (RTG) includes the Spine, Brain
Therapies, Specialty Therapies, and Pain Therapies
divisions. This is the first quarter RTG revenue is reported
in its new four division structure. RTG worldwide revenue of
$1.772 billion decreased 2 percent, or increased in the mid-single
digits on a CCCW basis. Group results were driven by strong
Brain Therapies and Specialty Therapies growth, as well as by
continued improvement in U.S. Spine, offsetting declines in Pain
Therapies, all on a CCCW basis.
-
In the Spine division, which now includes the
Core Spine, BMP, and Kanghui businesses, revenue of $645 million
decreased 6 percent, or was flat on a CCCW basis. The Core
Spine business grew in the low-single digits in the U.S. on a
constant weeks basis, in-line with the market, as a number of new
products and focus on procedural innovation is driving improved
results. BMP grew in the mid-single digits on a CCCW basis,
with high-single digit growth in the U.S. on a constant weeks basis
partially offset by the continued loss of InductOs(TM) sales in
Europe as a result of a shipping hold.
-
In the Brain Therapies division, which now
includes the Neurovascular, Brain Modulation, and Neurosurgery
businesses, revenue of $489 million increased 6 percent, or
increased in the low-double digits on a CCCW basis. All three
businesses had strong quarters, with Neurovascular growing in the
high-teens, Neurosurgery growing in the low-double digits, and
Brain Modulation growing in the mid-single digits, all on a CCCW
basis.
-
In the Specialty Therapies division, which now
includes the Pelvic Health, Advanced Energy, and ENT businesses,
revenue of $356 million increased 3 percent, or increased in the
low-double digits on a CCCW basis. All three businesses
delivered strong quarters, with Advanced Energy growing in the
high-teens, and Pelvic Health and ENT both growing in the
high-single digits, all on a CCCW basis.
-
In the Pain Therapies division, which now
includes the Pain (Spinal Cord Stimulation and Drug Pumps) and
Interventional Spine businesses, revenue of $282 million decreased
9 percent, or decreased in the low-single digits on a CCCW basis.
After adjusting for the divestiture of our drug business, which
occurred in the third quarter of fiscal year 2016, Pain Therapies
revenue was flat on a CCCW basis. Spinal Cord Stimulation
declined in the mid-single digits on a CCCW basis, as the business
faced competitive pressures. Drug Pumps grew in the mid-single
digits on a CCCW basis, as the business returned to growth
following declines over the past year as a result of its April 2015
U.S. FDA consent decree. Interventional Spine grew in the
low-single digits on a CCCW basis.
Diabetes Group
The Diabetes Group includes the Intensive Insulin Management (IIM),
Diabetes Service & Solutions (DSS), and Non-Intensive Diabetes
Therapies (NDT) divisions. Diabetes Group worldwide revenue of
$452 million increased 2 percent, or increased in the high-single
digits on a CCCW basis. The group had strong, broad-based
performance across all three divisions.
-
IIM grew in the high-single digits on a CCCW
basis, driven by continued strong sales in Europe and Asia Pacific
of the MiniMed® 640G System
with the enhanced Enlite® sensor and
SmartGuard(TM) technology.
-
NDT grew in the mid-seventies on a CCCW basis,
led by strong U.S. sales of the iPro®2 Professional
Continuous Glucose Monitor (CGM) technology with Pattern
Snapshot.
-
DSS grew in the high-single digits on a CCCW
basis as a result of solid growth of consumables, revenue from the
company's acquisition of Diabeter in Europe, and continued strong
growth of the MiniMed® Connect,
which over 18,000 people with diabetes are now using to view their
insulin pump and CGM information on a smartphone.
Revenue Outlook and EPS
Guidance
The company today reiterated its fiscal year 2017 revenue outlook
and EPS guidance. Consistent with the company's long-term,
mid-single digit constant currency revenue growth expectation, the
company continues to expect fiscal year 2017 revenue growth to be
in the range of 5 to 6 percent on a CCCW basis, which excludes the
benefit of the extra selling week in the company's first quarter of
fiscal year 2016, as well as the estimated benefit from foreign
currency in fiscal year 2017.
In addition, the company reiterated its diluted
non-GAAP EPS guidance for fiscal year 2017. The company
expects fiscal year 2017 diluted non-GAAP EPS growth in the range
of 12 to 16 percent on a CCCW basis, which excludes the estimated
negative impact of foreign currency translation, as well as the
benefit from the extra selling week in the company's first quarter
of fiscal year 2016. This annual EPS growth range is
consistent with the company's long-term, double digit constant
currency EPS growth expectation, and continues to imply fiscal year
2017 diluted non-GAAP EPS in the range of $4.60 to
$4.70. Other than as noted, EPS guidance does not include
charges or gains that would be recorded as non-GAAP adjustments to
earnings during the fiscal year.
"We feel very good about our momentum to start our
fiscal year, and we are confident in our ability to sustain this
performance over the coming quarters," said Ishrak. "We also
remain focused on fully understanding and leading the shift to
value-based healthcare systems that reward value and patient
outcomes over volume, and we continue to develop partnerships and
insights into how we can utilize our expertise to play a role in
this evolution. We feel the appropriate application of medical
technology can help address inefficiencies and improve outcomes in
healthcare delivery, driving new forms of value creation - for both
our customers and our shareholders."
Webcast Information
Medtronic will host a webcast today, August 25, at 8:00 a.m. EDT
(7:00 a.m. CDT) to provide information about its businesses for the
public, analysts, and news media. This quarterly webcast can
be accessed by clicking on the Investor Events link at
investorrelations.medtronic.com and this earnings release will be
archived at newsroom.medtronic.com. Medtronic will be live tweeting
during the webcast on our Newsroom Twitter account, @Medtronic.
Within 24 hours of the webcast, a replay of the webcast and
transcript of the company's prepared remarks will be available by
clicking on the Investor Events link at
investorrelations.medtronic.com.
Financial Schedules
To view the first quarter financial schedules and non-GAAP
reconciliations, click here. To view the first quarter earnings
presentation, click here. Both of these documents can also be
accessed by visiting newsroom.medtronic.com.
About Medtronic
Medtronic plc (www.medtronic.com), headquartered in Dublin,
Ireland, is among the world's largest medical technology, services
and solutions companies - alleviating pain, restoring health and
extending life for millions of people around the world. Medtronic
employs more than 88,000 people worldwide, serving physicians,
hospitals and patients in approximately 160 countries. The company
is focused on collaborating with stakeholders around the world to
take healthcare Further, Together.
FORWARD LOOKING
STATEMENTS
This press release contains forward-looking
statements related to product and service growth drivers, market
position and opportunities, the transforming healthcare
environment, strategies for and sustainability of growth, benefits
from collaborations and acquisitions, availability of and plans for
cash, product launches, and Medtronic's future results of
operations, which are subject to risks and uncertainties, such as
competitive factors, difficulties and delays inherent in the
development, manufacturing, marketing and sale of medical products,
challenges with respect to third-party collaborations and
integration of acquired businesses, effectiveness of growth
strategies, challenges relating to our worldwide operations,
challenges or unforeseen risks in implementing our growth
strategies, government regulation, fluctuations in foreign currency
exchange rates, and general economic conditions and other risks and
uncertainties described in Medtronic's periodic reports and other
filings with the U.S. Securities and Exchange Commission (the
"SEC"). Anticipated results only reflect information available to
Medtronic at this time and may differ from actual results.
Medtronic does not undertake to update its forward-looking
statements or any of the information contained in this press
release. Certain information in this press release includes
calculations or figures that have been prepared internally and have
not been reviewed or audited by our independent registered public
accounting firm, including but not limited to, certain information
in the financial schedules accompanying this press release. Use of
different methods for preparing, calculating or presenting
information may lead to differences and such differences may be
material.
NON-GAAP FINANCIAL
MEASURES
This press release contains financial measures and
guidance, including free cash flow figures (defined as operating
cash flows less property, plant and equipment additions), revenue
and growth rates on a constant currency and constant weeks basis,
and constant currency growth rates, net income, and diluted EPS,
all of which are considered "non-GAAP" financial measures under
applicable SEC rules and regulations. Unless otherwise noted, all
revenue amounts given in this press release are stated in
accordance with U.S. generally accepted accounting principles
(GAAP). References to quarterly figures increasing or decreasing
are in comparison to the first quarter of fiscal year 2016.
Medtronic management believes
that in order to properly understand its short-term and long-term
financial trends, including period over period comparisons of the
company's operations, investors may find it useful to exclude the
effect of certain charges or gains that contribute to or reduce
earnings but that result from transactions or events that
management believes may or may not recur with similar materiality
or impact to operations in future periods (Non-GAAP Adjustments).
Medtronic generally uses non-GAAP financial measures to facilitate
management's review of the operational performance of the company
and as a basis for strategic planning. Non-GAAP financial measures
should be considered supplemental to and not a substitute for
financial information prepared in accordance with GAAP, and
investors are cautioned that Medtronic may calculate non-GAAP
financial measures in a way that is different from other companies.
Management strongly encourages investors to review the company's
consolidated financial statements and publicly filed reports in
their entirety. Reconciliations of the non-GAAP financial measures
to the most directly comparable GAAP financial measures are
included in the financial schedules accompanying this press
release.
-end-
View FY17 First Quarter Financial Schedules &
Non-GAAP Reconciliations
View FY17 First Quarter Earnings Presentation
Contacts:
Fernando Vivanco
Public Relations
+1-763-505-3780
Ryan Weispfenning
Investor Relations
+1-763-505-4626
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Medtronic plc via Globenewswire
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