C. R. Bard, Inc. (NYSE:BCR) today reported 2017 first quarter
financial results, prior to their previously communicated schedule.
The company has included supplemental financial data on its website
related to this earnings release. Given the transaction announced
with Becton, Dickinson and Company (NYSE:BDX) today, and the
associated conference call tomorrow, the company is cancelling the
previously scheduled earnings conference call on April 26,
2017.
First quarter 2017 net sales were $938.8 million, an increase of
7 percent on an as-reported basis over the prior-year period.
Excluding the impact of foreign exchange, first quarter 2017 net
sales increased 8 percent over the prior-year period. Divested
products and acquisitions in the last twelve months favorably
impacted net sales growth by approximately 70 basis points.
For the first quarter 2017, net sales in the U.S. were $657.2
million and net sales outside the U.S. were $281.6 million, an
increase of 5 percent and 14 percent, respectively, over the
prior-year period. Excluding the impact of foreign exchange, first
quarter 2017 net sales outside the U.S. increased 17 percent over
the prior-year period.
For the first quarter 2017, net income was $178.1 million and
diluted earnings per share were $2.37, an increase of 53 percent
and 54 percent, respectively, as compared to first quarter 2016
results. Adjusting for amortization of intangibles and certain
items that affect comparability between periods as detailed in the
tables below, first quarter 2017 net income was $215.4 million and
diluted earnings per share were $2.87, an increase of 22 percent
and 23 percent, respectively, as compared to first quarter 2016
results.
In conjunction with the first quarter results, the company is
also updating financial guidance for the full year and providing
financial guidance for the second quarter of 2017. For the full
year 2017, net sales are now forecasted to increase between 5
percent and 6 percent on an as-reported basis. Excluding the impact
of foreign exchange, full year 2017 net sales are forecasted to
increase between 6 percent and 7 percent over 2016. Full year 2017
diluted earnings per share, after adjusting for amortization of
intangibles and certain items that affect comparability between
periods, are projected to be between $11.65 and $11.90,
representing growth between 13 percent and 16 percent compared to
full year 2016 results.
For the second quarter 2017, net sales are forecasted to
increase between 4 percent and 5 percent on an as-reported basis.
Excluding the impact of foreign exchange, second quarter 2017 net
sales are forecasted to increase between 6 percent and 7 percent
over second quarter 2016. Second quarter 2017 diluted earnings per
share, after adjusting for amortization of intangibles and certain
items that affect comparability between periods, are projected to
be between $2.75 and $2.85, representing growth between 8 percent
and 12 percent compared to second quarter 2016 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 December 31, 2016 Form 10-K 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 Income (dollars and shares in thousands except
per share amounts, unaudited) Quarter Ended March 31,
2017
2016
Net sales $ 938,800 $ 873,500 Costs and
expenses Cost of goods sold 354,200 320,400 Marketing, selling and
administrative expense 285,400 270,600 Research and development
expense 70,000 68,300 Interest expense 15,100 11,300 Other (income)
expense, net 12,600 60,000 Total
costs and expenses 737,300 730,600
Income from operations before income taxes 201,500
142,900 Income tax provision
23,400 26,700 Net income $ 178,100 $
116,200 Basic earnings per share available to common
shareholders $ 2.42 $ 1.56 Diluted earnings
per share available to common shareholders $ 2.37 $
1.54 Wt. avg. common shares outstanding - basic 73,100
74,000 Wt. avg. common and common equivalent shares
outstanding - diluted 74,700 75,200
Product Group
Summary of Net Sales (dollars in thousands, unaudited)
Quarter Ended March 31, Constant
2017 2016 Change Currency Vascular $ 256,600 $
239,500 7 % 8 % Urology 237,700 216,700 10 % 11 % Oncology 255,500
241,900 6 % 6 % Surgical Specialties 165,100 151,400 9 % 9 % Other
23,900 24,000 0 % 2 % Net sales $
938,800 $ 873,500 7 % Foreign exchange
impact (7,000 ) Constant Currency $
938,800 $ 866,500 8 %
Non-GAAP
Reconciliation of Earnings (dollars in millions except per
share amounts, unaudited)
Quarter Ended March 31, 2017 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 $ 354.2 $ 285.4 $ 70.0 $ 12.6 $
23.4 $ 178.1 $ 2.37 Amortization of intangible assets (32.2
) - - - 11.0 21.2
Items that affect
comparability of
results between
periods:
Acquisition-related items - (3.2 ) - (0.2 ) 0.8 2.6 Litigation
charges - - - (12.2 ) 0.1 12.1 Restructuring and productivity
initiative costs - - -
(2.7 ) 1.3 1.4
Total (32.2 ) (3.2 ) - (15.1 ) 13.2 37.3 0.50
Adjusted Basis $ 322.0 $
282.2 $ 70.0 $ (2.5 ) $ 36.6 $ 215.4 $
2.87 Quarter Ended March 31, 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 $ 320.4 $ 270.6 $ 68.3 $ 60.0 $
26.7 $ 116.2 $ 1.54 Amortization of intangible assets (32.4 ) - - -
11.0 21.4
Items that affect
comparability of
results between
periods:
Acquisition-related items 4.3 (4.1 ) (1.5 ) (3.2 ) 2.5 2.0
Litigation charges - - - (48.9 ) 18.1 30.8 Restructuring and
productivity initiative costs - -
- (9.8 ) 3.2
6.6 Total (28.1 ) (4.1 ) (1.5 ) (61.9 ) 34.8 60.8
0.81 Adjusted
Basis $ 292.3 $ 266.5 $ 66.8 $ (1.9 ) $
61.5 $ 177.0 $ 2.34 (1) Total per share
amounts do not add due to rounding.
Notes to Non-GAAP
Reconciliation of Earnings
- For the three months ended March 31,
2017, amortization of intangible assets was $32.2 million pre-tax
and the following items affected the comparability of results
between periods: (i) charges of $3.4 million pre-tax from
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (ii) litigation
charges of $12.2 million pre-tax related to a charge for Civil
Investigative Demands received from a number of State Attorneys
General (the “AG Matter”) and litigation-related defense costs in
connection with the District Court’s pre-trial orders that the
company prepare 540 individuals cases for trial (the “WHP Pre-Trial
Orders”); and (iii) charges of $2.7 million pre-tax for
restructuring and productivity initiatives. The net effect of these
items decreased net income by $37.3 million, or $0.50 diluted
earnings per share available to common shareholders.
- For the three months ended March 31,
2016, amortization of intangible assets was $32.4 million pre-tax
and the following items affected the comparability of results
between periods: (i) net charges of $4.5 million pre-tax from
acquisition-related items including transaction costs, purchase
accounting adjustments and integration costs; (ii) a charge of
$48.9 million pre-tax related to estimated costs for product
liability matters; and (iii) charges of $9.8 million pre-tax for
restructuring and productivity initiatives. The net effect of these
items decreased net income by $60.8 million, or $0.81 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 impact of
amortization of intangible assets and acquisition-related items;
(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 the impact of
acquisition-related items, litigation charges (which includes a
charge for the AG Matter and litigation-related defense costs in
connection with the WHP Pre-Trial Orders) and restructuring and
productivity initiative costs; (5) the tax effect of the items set
forth in (1) through (4) above; (6) net income excluding the items
set forth in (1) through (5) above; and (7) diluted earnings per
share available to common shareholders 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 per Share
(dollars and shares in thousands, except
per share amounts, unaudited)
Quarter Ended March 31, 2017 2016
Earnings per Share Numerator: GAAP Basis - basic and diluted Net
income $ 178,100 $ 116,200 Less: Income allocated to participating
securities (1) 900 600 Net income available to common
shareholders $ 177,200 $ 115,600 Earnings per Share
Numerator: Adjusted Earnings Net income $ 215,400 $ 177,000 Less:
Income allocated to participating securities (1) 1,100
800 Net income available to common shareholders $ 214,300 $
176,200 Earnings per Share Denominator: Wt. avg. common
shares outstanding - basic 73,100 74,000 Wt. avg. common and common
equivalent shares outstanding - diluted 74,700 75,200
Earnings per Share: GAAP Basis Basic earnings per share available
to common shareholders $ 2.42 $ 1.56 Diluted earnings per share
available to common shareholders $ 2.37 $ 1.54 Earnings per
Share: Adjusted Earnings Diluted earnings per share available to
common shareholders $ 2.87 $ 2.34 (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.
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version on businesswire.com: http://www.businesswire.com/news/home/20170423005043/en/
For 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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