C. R. Bard, Inc. (NYSE:BCR) today reported 2017 second quarter
financial results. Second quarter 2017 net sales were $979.7
million, an increase of 5 percent over the prior-year period
on an as-reported basis. Excluding the impact of foreign exchange,
second quarter 2017 net sales increased 6 percent over the
prior-year period.
For the second quarter 2017, net sales in the U.S. were $660.2
million, an increase of 4 percent over the prior-year period. Net
sales outside the U.S. were $319.5 million, an increase of 7
percent from the prior-year period on an as-reported basis.
Excluding the impact of foreign exchange, second quarter 2017 net
sales outside the U.S. increased 11 percent over the prior-year
period.
For the second quarter 2017, net income was $139.7 million and
diluted earnings per share were $1.86, both decreased 12 percent as
compared to second quarter 2016 results. Adjusting for amortization
of intangibles and certain items that affect the comparability of
results between periods, as detailed in the tables below, second
quarter 2017 net income was $219.4 million and diluted earnings per
share were $2.92, an increase of 14 percent and 15 percent,
respectively, as compared to second quarter 2016 results.
Timothy M. Ring, chairman and chief executive officer,
commented, “We continue to see strong, balanced growth across our
portfolio and geographies. Half-way through 2017, each of our
businesses has performed at or above the top of our forecasted
constant currency revenue growth ranges for the full year. In the
second quarter we reached a new milestone, with revenue from
emerging markets now representing 12 percent of total company
revenues. We are pleased with the continued momentum of our global
business as we prepare to merge with Becton, Dickinson and Company
in the fourth quarter of 2017.”
In conjunction with the second quarter results, the company is
maintaining its 2017 financial revenue guidance and increasing its
adjusted diluted earnings per share guidance. For the full year
2017, net sales are 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 $11.70 and $11.90, representing growth
between 14 percent and 16 percent compared to full year 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 March 31, 2017 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
Income (dollars and shares in thousands except per share
amounts, unaudited)
Quarter Ended Six Months Ended June 30, June
30,
2017
2016
2017
2016
Net sales $ 979,700 $ 931,500 $ 1,918,500 $ 1,805,000 Costs
and expenses Cost of goods sold 361,300 351,000 715,500 671,400
Marketing, selling and administrative expense 287,300 278,500
572,700 549,100 Research and development expense 74,500 71,300
144,500 139,600 Interest expense 15,100 13,400 30,200 24,700 Other
(income) expense, net 72,700 9,600 85,300
69,600 Total costs and expenses 810,900
723,800 1,548,200 1,454,400 Income from operations
before income taxes 168,800 207,700 370,300
350,600 Income tax provision 29,100
48,500 52,500 75,200 Net income $ 139,700 $
159,200 $ 317,800 $ 275,400 Basic earnings per share
available to common shareholders $ 1.90 $ 2.14 $ 4.32 $ 3.70
Diluted earnings per share available to common shareholders $ 1.86
$ 2.11 $ 4.23 $ 3.64 Wt. avg. common shares outstanding -
basic 73,100 74,000 73,100 74,000 Wt. avg. common and common
equivalent shares outstanding - diluted 74,800 75,200 74,700 75,200
Product Group Summary of Net Sales (dollars in
thousands, unaudited)
Quarter Ended June 30, Six Months Ended
June 30, Constant Constant 2017 2016 Change Currency 2017 2016
Change Currency Vascular $ 277,600 $ 255,300 9 % 10 % $ 534,200 $
494,800 8 % 9 % Urology 241,300 240,000 1 % 2 % 479,000 456,700 5 %
6 % Oncology 266,500 252,400 6 % 7 % 522,000 494,300 6 % 6 %
Surgical Specialties 169,700 159,900 6 % 7 % 334,800 311,300 8 % 8
% Other 24,600 23,900 3 % 6 % 48,500
47,900 1 % 4 % Net sales $ 979,700 $ 931,500 5
% $ 1,918,500 $ 1,805,000 6 % Foreign exchange impact
(11,100 ) (18,100 ) Constant Currency $
979,700 $ 920,400 6 % $ 1,918,500 $ 1,786,900 7 %
Non-GAAP Reconciliation of Earnings (dollars
in millions except per share amounts, unaudited)
Quarter Ended June
30, 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 $ 361.3 $ 287.3 $ 74.5
$ 72.7 $ 29.1 $ 139.7 $ 1.86 Amortization of intangible assets
(32.3 ) - - - 11.1 21.2
Items that affect
comparability of
results between
periods:
Acquisition-related items (0.2 ) (1.4 ) (1.6 ) 0.6 0.7 1.9
Litigation charges - - - (66.1 ) 15.8 50.3 BD transaction costs - -
- (6.6 ) 0.5 6.1 Restructuring and productivity initiative costs -
- - (2.5 ) 0.8 1.7 Gore proceeds - -
- 2.4 (0.9 ) (1.5 )
Total (32.5 ) (1.4 ) (1.6 )
(72.2 ) 28.0 79.7 1.06 Adjusted
Basis $ 328.8 $ 285.9 $ 72.9 $ 0.5 $
57.1 $ 219.4 $ 2.92 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 Six Months Ended June 30, 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 $ 715.5 $ 572.7 $ 144.5 $ 85.3 $
52.5 $ 317.8 $ 4.23 Amortization of intangible assets (64.5 ) - - -
22.1 42.4
Items that affect
comparability of
results between
periods:
Acquisition-related items (0.2 ) (4.6 ) (1.6 ) 0.4 1.5 4.5
Litigation charges - - - (78.3 ) 15.9 62.4 BD transaction costs - -
- (6.6 ) 0.5 6.1 Restructuring and productivity initiative costs -
- - (5.2 ) 2.1 3.1 Gore proceeds - -
- 2.4 (0.9 ) (1.5 )
Total (64.7 ) (4.6 ) (1.6 )
(87.3 ) 41.2 117.0 1.56 Adjusted
Basis $ 650.8 $ 568.1 $ 142.9 $ (2.0 ) $ 93.7
$ 434.8 $ 5.79 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 (1)
Total per share amounts do not add due to rounding.
Notes to Non-GAAP
Reconciliation of Earnings
- For the second quarter 2017,
amortization of intangible assets was $32.3 million pre-tax and the
following items affected the comparability of results between
periods: (i) charges of $2.6 million pre-tax from
acquisition-related items including purchased research and
development, transaction costs, purchase accounting adjustments and
integration costs; (ii) charges of $66.1 million pre-tax related to
estimated costs for product liability matters and
litigation-related defense costs in connection with the District
Court’s pre-trial orders that the company prepare additional
individuals cases for trial (the “WHP Pre-Trial Orders”); (iii)
charges of $6.6 million pre-tax for transaction costs related to
the Agreement and Plan of Merger (the “Merger Agreement”) with
Becton, Dickinson and Company (“BD”); (iv) charges of $2.5 million
pre-tax for restructuring and productivity initiatives; and (v) a
gain of $2.4 million pre-tax related to an agreement to settle the
dispute and end the litigation with W. L. Gore & Associates,
Inc. (“Gore”). The net effect of these items decreased net income
by $79.7 million, or $1.06 diluted earnings per share available to
common shareholders.
- 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 six months ended June 30, 2017,
amortization of intangible assets was $64.5 million pre-tax and the
following items affected the comparability of results between
periods: (i) charges of $6.0 million pre-tax from
acquisition-related items including purchased research and
development, transaction costs, purchase accounting adjustments and
integration costs; (ii) charges of $78.3 million pre-tax related to
estimated costs for product liability matters, litigation-related
defense costs in connection with the WHP Pre-Trial Orders, and for
Civil Investigative Demands received from a number of State
Attorneys General (the “AG Matter”); (iii) charges of $6.6 million
pre-tax for transaction costs related to the Merger Agreement with
BD; (iv) charges of $5.2 million pre-tax for restructuring and
productivity initiatives; and (v) a gain of $2.4 million pre-tax
related to an agreement to settle the dispute and end the
litigation with Gore. The net effect of these items decreased net
income by $117.0 million, or $1.56 diluted earnings 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 costs 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.
------------------------------------------------------------------------
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, 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 the impact of
acquisition-related items, litigation charges (which includes
product liability matters, litigation-related defense costs in
connection with the WHP Pre-Trial Orders, and for the AG Matter),
BD transaction costs, restructuring and productivity initiative
costs and Gore proceeds; (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 Six Months Ended
June 30, June 30, 2017 2016 2017 2016 Earnings per
Share Numerator: GAAP Basis - basic and diluted Net income $
139,700 $ 159,200 $ 317,800 $ 275,400 Less: Income allocated to
participating securities (1) 700 800 1,700
1,400 Net income available to common shareholders $ 139,000
$ 158,400 $ 316,100 $ 274,000 Earnings per Share Numerator:
Adjusted Earnings Net income $ 219,400 $ 192,200 $ 434,800 $
369,200 Less: Income allocated to participating securities (1)
1,200 1,000 2,300 1,900 Net income
available to common shareholders $ 218,200 $ 191,200 $ 432,500 $
367,300 Earnings per Share Denominator: Wt. avg. common
shares outstanding - basic 73,100 74,000 73,100 74,000 Wt. avg.
common and common equivalent shares outstanding - diluted 74,800
75,200 74,700 75,200 Earnings per Share: GAAP Basis Basic
earnings per share available to common shareholders $ 1.90 $ 2.14 $
4.32 $ 3.70 Diluted earnings per share available to common
shareholders $ 1.86 $ 2.11 $ 4.23 $ 3.64 Earnings per Share:
Adjusted Earnings Diluted earnings per share available to common
shareholders $ 2.92 $ 2.54 $ 5.79 $ 4.88
(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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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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