IRVINE, Calif., Jan. 27,
2021 /PRNewswire/ -- Edwards Lifesciences (NYSE: EW) today
reported financial results for the quarter ended December 31,
2020.
Fourth Quarter Highlights and Outlook
- Q4 sales increased 1 percent to $1.2
billion; underlying1 sales flat
- Q4 TAVR sales grew 2 percent; underlying sales flat
- Q4 EPS was $0.49;
adjusted1 EPS grew 2 percent to $0.50
- December investor conference highlighted 2021 and long-term
outlook
- 2021 guidance reiterated with sales growth expected in the
mid-teens
"Despite unprecedented challenges in 2020, I'm proud of our
team's steadfast dedication to patients and advancing
Edwards' long-term strategy. We continued to invest in
developing solutions that extend lives, improve quality of life,
and offer greater value to the healthcare system," said
Michael A. Mussallem, chairman and
CEO. "As we look to 2021 and beyond, I am as excited as ever
about the work happening at Edwards and, more importantly, what we
envision for the future of patient care."
2020 Full Year Results
Sales for the year ended December 31, 2020, were
$4.4 billion, up 1 percent over the
prior year, on both a reported and underlying basis. Diluted
earnings per share for 2020 were $1.30, while adjusted earnings per share of
$1.86 were unchanged from the
year-ago period.
Transcatheter Aortic Valve Replacement (TAVR)
The company reported fourth quarter global TAVR sales
of $776 million, a year-over-year increase of 2 percent
on a reported basis and flat on an underlying basis. COVID
had a more pronounced impact on the company's U.S. sales, which
declined mid-single digits, while OUS sales increased in the
high-single digit range on an underlying, year-over-year basis.
Global average selling prices remained stable.
Looking ahead to 2021, the company continues to anticipate
underlying sales growth in the 15 to 20 percent range, with
significant COVID-related challenges early in 2021 turning to a
more normalized growth environment in the second half of the
year. Edwards remains confident that this large global
opportunity will exceed $7 billion by
2024, which implies a compounded annual growth rate in the
low-double digit range.
Transcatheter Mitral and Tricuspid Therapies (TMTT)
TMTT continues to make meaningful progress moving from
early-stage development to clinical use across all of Edwards'
platforms, with over 3,000 patients treated to date. To
transform treatment and unlock this significant longer-term growth
opportunity, TMTT remains focused on three key value drivers: a
portfolio of differentiated therapies, positive pivotal trial
results to support approvals and adoption, and favorable real-world
clinical outcomes.
Despite COVID headwinds, fourth quarter global sales were
$13 million, representing sequential
improvement versus the third quarter.
Edwards continues to estimate the global TMTT opportunity to
reach $3 billion by 2025 and remains
committed to transforming the treatment of patients with mitral and
tricuspid valve disease around the world.
Surgical Structural Heart and Critical Care
Surgical Structural Heart sales for the quarter were
$204 million, down one percent
compared to the fourth quarter of 2019, and down two percent on an
underlying basis. As hospitals experienced an influx of COVID
patients, surgical valve procedures were limited. This was
partially offset by continued strong adoption of the company's
premium technologies.
Critical Care sales were $198
million for the quarter, representing a decline of one
percent versus the fourth quarter of 2019, or two percent on an
underlying basis, driven by the decline in HemoSphere orders in the
U.S. as hospitals limited their capital spending. Sales of TruWave
disposable pressure monitoring devices used in the ICU were lifted
by the increased COVID hospitalizations late in the fourth quarter
in both the U.S. and Europe.
Additional Financial Results
For the quarter, the company's adjusted gross margin was 75.3
percent, compared to 75.8 percent in the same period last
year. This reduction was driven by a negative impact from FX
and incremental costs associated with responding to COVID,
partially offset by lower performance-based compensation.
Selling, general and administrative expenses in the fourth
quarter were $339 million, or 28.4
percent of sales, compared to $347
million in the prior year. This decrease was primarily
driven by reduced spending resulting from COVID and lower
performance-based compensation, partially offset by the impact from
FX.
Research and development expenses in the fourth quarter were
$196 million, or 16.4 percent of
sales, compared to $194 million in
the prior year. This small increase was primarily the result
of higher investments in transcatheter mitral valve replacement and
costs associated with discontinuing the SUTRAFIX program, partially
offset by reduced performance-based compensation.
Free cash flow for the fourth quarter was $287 million, defined as cash flow from operating
activities of $400 million, less
capital spending of $113 million.
Cash and investments totaled $2.2
billion at December 31, 2020. Total debt was
$595 million.
Outlook
Overall, full year 2021 sales guidance for Edwards remains
$4.9 to $5.3
billion. Additionally, the company continues to expect
full year 2021 adjusted earnings per share of $2.00 to $2.20.
For the first quarter of 2021, the company projects total sales
to be between $1.1 and $1.2 billion, and adjusted EPS of $0.43 to $0.50.
"Even though we expect a COVID impact on sales in the start of
the year, we are continuing to invest now in our innovations that
have tremendous opportunity to enhance patients' lives and bring
significant value to the healthcare system," said Mussallem.
"We recognize the uncertain impact and timeframe for recovery from
this unique global challenge but remain confident that our
patient-focused strategy of continued investment positions us to be
even stronger when the world emerges from the pandemic."
About Edwards
Lifesciences
Edwards Lifesciences is the global leader of patient-focused
innovations for structural heart disease and critical care
monitoring. We are driven by a passion for patients,
dedicated to improving and enhancing lives through partnerships
with clinicians and stakeholders across the global healthcare
landscape. For more information, visit Edwards.com and follow us on
Facebook, Instagram, LinkedIn, Twitter and YouTube.
Conference Call and Webcast
Information
Edwards Lifesciences will be hosting a conference call today at
2:00 p.m. PT to discuss its fourth quarter results. To
participate in the conference call, dial (877) 704-2848 or (201)
389-0893. For 72 hours following the call, an audio replay
can be accessed by dialing (877) 660-6853 or (201) 612-7415 and
using conference number 13714408. The call will also be
available via live or archived webcast on the "Investor Relations"
section of the Edwards web site at ir.edwards.com or
www.edwards.com.
This news release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements can sometimes be identified by the use
of words such as "may," "will," "should," "anticipate," "believe,"
"plan," "project," "estimate," "potential," "predict," "early
clinician feedback," "expect," "intend," "guidance," "outlook,"
"optimistic," "aspire," "confident" or other forms of these
words or similar expressions and include, but are not limited to,
statements made by Mr. Mussallem, first quarter and full year 2021
financial guidance, and statements regarding the TAVR and TMTT
opportunity, the compounded annual growth rate for TAVR, and the
pathway to success in TMTT, including, but not limited to,
approvals, adoption, clinical outcomes, and information in the
Outlook section. No inferences or assumptions should be made
from statements of past performance, efforts, or results which may
not be indicative of future performance or results.
Forward-looking statements are based on estimates and assumptions
made by management of the company and are believed to be
reasonable, though they are inherently uncertain, difficult to
predict, and may be outside of the company's control. The
company's forward-looking statements speak only as of the date on
which they are made and the company does not undertake any
obligation to update any forward-looking statement to reflect
events or circumstances after the date of the statement. If
the company does update or correct one or more of these
statements, investors and others should not conclude that the
company will make additional updates or corrections.
Forward-looking statements involve risks and uncertainties that
could cause actual results or experience to differ materially from
that expressed or implied by the forward-looking statements.
Factors that could cause actual results or experience to differ
materially from that expressed or implied by the forward-looking
statements include risk and uncertainties associated with
COVID pandemic, clinical trial or commercial results or new product
approvals and therapy adoption; unpredictability of product
launches; competitive dynamics; changes to reimbursement for the
company's products; the company's success in developing new
products and avoiding manufacturing and quality issues; the impact
of currency exchange rates; the timing or results of R&D and
clinical trials; unanticipated actions by the U.S. Food and Drug
Administration and other regulatory agencies; unexpected litigation
impacts or expenses; and other risks detailed in the company's
filings with the Securities and Exchange Commission (SEC),
including its Annual Report on Form 10-K for the year ended
December 31, 2019 and the company's other filings with the
SEC. These filings, along with important safety information
about our products, may be found at edwards.com.
Edwards, Edwards Lifesciences, the stylized E logo, HemoSphere,
TruWave, and SUTRAFIX are trademarks of Edwards Lifesciences
Corporation or its affiliates. All other trademarks are the
property of their respective owners. This statement is made
on behalf of Edwards Lifesciences Corporation and its
subsidiaries.
|
[1]
|
"Adjusted" amounts
are non-GAAP items. Adjusted sales, or "underlying" growth
rates, in this press release excludes foreign exchange fluctuations
and includes the prior year sales results of a business acquired as
if the acquisition had occurred at the beginning of the earliest
period presented. Adjusted earnings per share is a non-GAAP
item computed on a diluted basis and in this press release also
excludes intellectual property litigation expenses, amortization of
intangible assets, fair value adjustments to contingent
consideration liabilities arising from acquisitions, significant
charges associated with TAVR inventory write-offs, impairment of
long-lived assets, and the purchase of intellectual property.
See the Non-GAAP Financial Information page and reconciliation
tables below.
|
EDWARDS
LIFESCIENCES CORPORATION Unaudited Consolidated
Statements of
Operations (in millions, except per share data)
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net sales
|
$
|
1,191.7
|
|
|
$
|
1,174.1
|
|
|
$
|
4,386.3
|
|
|
$
|
4,348.0
|
|
Cost of
sales
|
296.3
|
|
|
286.2
|
|
|
1,080.6
|
|
|
1,114.4
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
895.4
|
|
|
887.9
|
|
|
3,305.7
|
|
|
3,233.6
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expenses
|
338.5
|
|
|
347.2
|
|
|
1,228.4
|
|
|
1,242.2
|
|
Research and
development expenses
|
195.7
|
|
|
193.9
|
|
|
760.7
|
|
|
752.7
|
|
Intellectual property
litigation expenses
|
4.6
|
|
|
13.9
|
|
|
405.4
|
|
|
33.4
|
|
Change in fair value
of contingent consideration liabilities, net
|
5.2
|
|
|
(18.5)
|
|
|
13.6
|
|
|
(6.1)
|
|
Special
charges
|
—
|
|
|
40.6
|
|
|
—
|
|
|
64.6
|
|
|
|
|
|
|
|
|
|
Operating
income
|
351.4
|
|
|
310.8
|
|
|
897.6
|
|
|
1,146.8
|
|
|
|
|
|
|
|
|
|
Interest income,
net
|
(0.5)
|
|
|
(4.3)
|
|
|
(7.6)
|
|
|
(11.5)
|
|
Other income,
net
|
(4.2)
|
|
|
(0.4)
|
|
|
(11.5)
|
|
|
(8.2)
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
356.1
|
|
|
315.5
|
|
|
916.7
|
|
|
1,166.5
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
46.6
|
|
|
35.3
|
|
|
93.3
|
|
|
119.6
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
309.5
|
|
|
$
|
280.2
|
|
|
$
|
823.4
|
|
|
$
|
1,046.9
|
|
|
|
|
|
|
|
|
|
Earnings per
share: (A)
|
|
|
|
|
|
|
|
Basic
|
$
|
0.50
|
|
|
$
|
0.45
|
|
|
$
|
1.32
|
|
|
$
|
1.68
|
|
Diluted
|
$
|
0.49
|
|
|
$
|
0.44
|
|
|
$
|
1.30
|
|
|
$
|
1.64
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding: (A)
|
|
|
|
|
|
|
|
Basic
|
623.5
|
|
|
626.3
|
|
|
622.6
|
|
|
624.8
|
|
Diluted
|
632.0
|
|
|
637.9
|
|
|
631.9
|
|
|
636.7
|
|
|
|
|
|
|
|
|
|
Operating
statistics
|
|
|
|
|
|
|
|
As a percentage of
net sales:
|
|
|
|
|
|
|
|
Gross
profit
|
75.1
|
%
|
|
75.6
|
%
|
|
75.4
|
%
|
|
74.4
|
%
|
Selling, general, and
administrative expenses
|
28.4
|
%
|
|
29.6
|
%
|
|
28.0
|
%
|
|
28.6
|
%
|
Research and
development expenses
|
16.4
|
%
|
|
16.5
|
%
|
|
17.3
|
%
|
|
17.3
|
%
|
Operating
income
|
29.5
|
%
|
|
26.5
|
%
|
|
20.5
|
%
|
|
26.4
|
%
|
Income before
provision for income taxes
|
29.9
|
%
|
|
26.9
|
%
|
|
20.9
|
%
|
|
26.8
|
%
|
Net income
|
26.0
|
%
|
|
23.9
|
%
|
|
18.8
|
%
|
|
24.1
|
%
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
13.1
|
%
|
|
11.2
|
%
|
|
10.2
|
%
|
|
10.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Numbers may not
calculate due to rounding.
|
|
(A) All share and per share amounts
were adjusted for the May 29, 2020 three-for-one stock
split.
|
EDWARDS
LIFESCIENCES CORPORATION Unaudited Balance
Sheets
|
(in
millions)
|
December
31,
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,183.2
|
|
|
$
|
1,179.1
|
|
Short-term
investments
|
219.4
|
|
|
337.8
|
|
Accounts receivable,
net
|
514.6
|
|
|
543.6
|
|
Other
receivables
|
88.2
|
|
|
55.5
|
|
Inventories,
net
|
802.3
|
|
|
640.9
|
|
Prepaid
expenses
|
75.1
|
|
|
59.1
|
|
Other current
assets
|
208.2
|
|
|
168.0
|
|
Total current
assets
|
3,091.0
|
|
|
2,984.0
|
|
|
|
|
|
Long-term
investments
|
801.6
|
|
|
585.5
|
|
Property, plant, and
equipment, net
|
1,395.2
|
|
|
1,060.3
|
|
Operating lease
right-of-use assets
|
94.2
|
|
|
80.1
|
|
Goodwill
|
1,173.2
|
|
|
1,167.7
|
|
Other intangible
assets, net
|
331.4
|
|
|
336.5
|
|
Deferred income
taxes
|
230.9
|
|
|
172.2
|
|
Other
assets
|
119.6
|
|
|
101.8
|
|
|
|
|
|
Total
assets
|
$
|
7,237.1
|
|
|
$
|
6,488.1
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
866.7
|
|
|
$
|
876.9
|
|
Operating lease
liabilities
|
27.2
|
|
|
25.5
|
|
Total current
liabilities
|
893.9
|
|
|
902.4
|
|
|
|
|
|
Long-term
debt
|
595.0
|
|
|
594.4
|
|
Contingent
consideration liabilities
|
186.1
|
|
|
172.5
|
|
Taxes
payable
|
215.3
|
|
|
236.6
|
|
Operating lease
liabilities
|
72.7
|
|
|
58.9
|
|
Uncertain tax
positions
|
214.4
|
|
|
171.7
|
|
Litigation settlement
accrual
|
233.0
|
|
|
—
|
|
Other
liabilities
|
252.4
|
|
|
203.3
|
|
|
|
|
|
Stockholders'
equity (A)
|
|
|
|
Common
stock
|
636.4
|
|
|
218.1
|
|
Additional paid-in
capital
|
1,438.1
|
|
|
1,623.3
|
|
Retained
earnings
|
4,565.0
|
|
|
3,741.6
|
|
Accumulated other
comprehensive loss
|
(161.1)
|
|
|
(156.0)
|
|
Treasury stock, at
cost
|
(1,904.1)
|
|
|
(1,278.7)
|
|
Total stockholders'
equity
|
4,574.3
|
|
|
4,148.3
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
7,237.1
|
|
|
$
|
6,488.1
|
|
|
|
|
|
(A)
|
Current year balances
reflect the May 29, 2020 three-for-one stock split. Balances
at December 31, 2019 were not
retroactively adjusted to reflect the stock split.
|
EDWARDS LIFESCIENCES CORPORATION
Non-GAAP Financial
Information
To supplement the consolidated financial results prepared in
accordance with Generally Accepted Accounting Principles ("GAAP"),
the Company uses non-GAAP historical financial measures.
Management makes adjustments to the GAAP measures for items (both
charges and gains) that (a) do not reflect the core operational
activities of the Company, (b) are commonly adjusted within the
Company's industry to enhance comparability of the Company's
financial results with those of its peer group, or (c) are
inconsistent in amount or frequency between periods (albeit such
items are monitored and controlled with equal diligence relative to
core operations). The Company uses the term "adjusted sales"
or "underlying growth rate" when referring to non-GAAP sales
information, which excludes foreign exchange rate fluctuations and
includes the prior year sales results of a business acquired as if
the acquisition had occurred at the beginning of the earliest
period presented. The Company uses the term "adjusted" to also
exclude intellectual property litigation expenses, amortization of
intangible assets, fair value adjustments to contingent
consideration liabilities arising from acquisitions, significant
charges associated with transcatheter aortic valve replacement
("TAVR") inventory write offs, impairment of long-lived assets, and
the purchase of intellectual property.
Management uses non-GAAP financial measures internally for
strategic decision making, forecasting future results, and
evaluating current performance. These non-GAAP financial
measures are used in addition to, and in conjunction with, results
presented in accordance with GAAP and reflect an additional way of
viewing aspects of the Company's operations by investors that, when
viewed with its GAAP results, provide a more complete understanding
of factors and trends affecting the Company's business and
facilitate comparability to historical periods.
Non-GAAP financial measures are not prepared in accordance with
GAAP; therefore, the information is not necessarily comparable to
other companies and should be considered as a supplement to, and
not as a substitute for, or superior to, the corresponding measures
calculated in accordance with GAAP. A reconciliation of
non-GAAP historical financial measures to the most comparable GAAP
measure is provided in the tables below.
Fluctuations in exchange rates impact the comparative results
and sales growth rates of the Company's underlying business.
Management believes that excluding the impact of foreign exchange
rate fluctuations from its sales growth provides investors a more
useful comparison to historical financial results. The impact of
foreign exchange rate fluctuations has been detailed in the
"Reconciliation of Sales by Product Group and Region."
Guidance for sales and sales growth rates is provided on an
"underlying basis," and projections for diluted earnings per share,
net income and growth, gross profit margin, taxes, and free cash
flow are also provided on a non-GAAP basis as adjusted for the
items identified above due to the inherent difficulty in
forecasting such items without unreasonable efforts. The
Company is not able to provide a reconciliation of the non-GAAP
guidance to comparable GAAP measures due to the unknown effect,
timing, and potential significance of special charges or gains, and
management's inability to forecast charges associated with future
transactions and initiatives.
Management considers free cash flow to be a liquidity measure
which provides useful information to management and investors about
the amount of cash generated by business operations, after
deducting payments for capital expenditures, which can then be used
for strategic opportunities or other business purposes including,
among others, investing in the Company's business, making strategic
acquisitions, strengthening the balance sheet, and repurchasing
stock.
The items described below are adjustments to the GAAP
financial results in the reconciliations that follow:
Litigation Settlement - In the second quarter of 2020,
the Company recorded a $367.9 million
charge to settle certain patent litigation related to transcatheter
mitral and tricuspid repair products.
Intellectual Property Litigation Expenses - The
Company incurred intellectual property litigation expenses of
$12.5 million and $4.6 million in the first quarter of 2020 and
2019, respectively, $12.0 million
and $7.0 million in the second
quarter of 2020 and 2019, respectively, $8.4
million and $7.9 million in
the third quarter of 2020 and 2019, respectively, and $4.6 million and $13.9
million in the fourth quarter of 2020 and 2019,
respectively.
Change in Fair Value of Contingent Consideration Liabilities,
net - The Company recorded income of $2.2 million and expense of $6.7 million in the first quarter of 2020 and
2019, respectively, expenses of $19.6
million and $8.0 million in
the second quarter of 2020 and 2019, respectively, income of
$9.0 million and $2.3 million in the third quarter of 2020 and
2019, respectively, and expense of $5.2
million and income of $18.5
million in the fourth quarter of 2020 and 2019,
respectively, related to changes in the fair value of its
contingent consideration liabilities arising from acquisitions.
Amortization of Intangible Assets - The Company recorded
amortization expense related to developed technology, patents and
trademarks in the amount of $1.7
million and $0.5 million in
the first quarter of 2020 and 2019, respectively, $1.3 million and $1.2
million in the second quarter of 2020 and 2019,
respectively, $1.0 million and
$1.3 million in the third quarter of
2020 and 2019, respectively, and $1.4
million and $1.6 million in
the fourth quarter of 2020 and 2019, respectively.
TAVR Inventory Write Off - The Company recorded a
$46.2 million charge in the second
quarter of 2019 and a $26.9 million
charge in the third quarter of 2019, primarily comprised of the
write off of inventory in response to strategic decisions regarding
its TAVR portfolio.
Impairment of Long-lived Assets - The Company
recorded a $40.6 million charge in
the fourth quarter of 2019 related to the other-than-temporary
impairment of certain in-process research and development acquired
as part of the acquisition of Valtech Cardio Ltd.
Purchase of Intellectual Property - The Company recorded
a $24.0 million charge in the first
quarter of 2019 related to the acquisition of early-stage
transcatheter intellectual property and associated clinical and
regulatory experience.
Provision for Income Taxes - The income tax impact of the
expenses and gains discussed above is based upon the items'
forecasted effect upon the Company's full year effective tax
rate. Adjustments to forecasted items unrelated to these
expenses and gains, as well as impacts related to interim
reporting, will have an effect on the income tax impact of these
items in subsequent periods.
EDWARDS
LIFESCIENCES CORPORATION Unaudited Reconciliation of GAAP
to Non-GAAP Financial Information (in millions, except
per share and percentage data)
|
|
|
|
Three Months Ended
December 31, 2020
|
|
|
Net
Sales
|
|
Gross Profit
Margin
|
|
Operating
Income
|
|
Net
Income
|
|
Diluted
EPS
|
|
Effective Tax
Rate
|
GAAP
|
|
$
|
1,191.7
|
|
|
75.1
|
%
|
|
$
|
351.4
|
|
|
$
|
309.5
|
|
|
$
|
0.49
|
|
|
13.1
|
%
|
Non-GAAP
adjustments: (A) (B)
|
|
|
|
|
|
|
|
|
|
|
|
|
Intellectual property
litigation expenses
|
|
—
|
|
|
—
|
|
|
4.6
|
|
|
2.4
|
|
|
—
|
|
|
0.4
|
|
Change in fair value
of contingent consideration liabilities, net
|
|
—
|
|
|
—
|
|
|
5.2
|
|
|
4.2
|
|
|
0.01
|
|
|
0.1
|
|
Amortization of
intangible assets
|
|
—
|
|
|
0.2
|
|
|
1.4
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
Prior period ongoing
tax impacts (D)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0)
|
|
|
—
|
|
|
0.3
|
|
Adjusted
|
|
$
|
1,191.7
|
|
|
75.3
|
%
|
|
$
|
362.6
|
|
|
$
|
316.2
|
|
|
$
|
0.50
|
|
|
13.9
|
%
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2019
|
|
|
Net
Sales
|
|
Gross Profit
Margin
|
|
Operating
Income
|
|
Net
Income
|
|
Diluted
EPS (C)
|
|
Effective Tax
Rate
|
GAAP
|
|
$
|
1,174.1
|
|
|
75.6
|
%
|
|
$
|
310.8
|
|
|
$
|
280.2
|
|
|
$
|
0.44
|
|
|
11.2
|
%
|
Non-GAAP
adjustments: (A) (B)
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of
long-lived assets
|
|
—
|
|
|
—
|
|
|
40.6
|
|
|
40.6
|
|
|
0.06
|
|
|
(1.0)
|
|
Intellectual property
litigation expenses
|
|
—
|
|
|
—
|
|
|
13.9
|
|
|
9.8
|
|
|
0.02
|
|
|
0.6
|
|
Change in fair value
of contingent consideration liabilities, net
|
|
—
|
|
|
—
|
|
|
(18.5)
|
|
|
(19.1)
|
|
|
(0.03)
|
|
|
0.7
|
|
Amortization of
intangible assets
|
|
—
|
|
|
0.2
|
|
|
1.6
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
Prior period ongoing
tax impacts (D)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.3)
|
|
|
—
|
|
|
0.8
|
|
Adjusted
|
|
$
|
1,174.1
|
|
|
75.8
|
%
|
|
$
|
348.4
|
|
|
$
|
309.6
|
|
|
$
|
0.49
|
|
|
12.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, 2020
|
|
|
Net
Sales
|
|
Gross Profit
Margin
|
|
Operating
Income
|
|
Net
Income
|
|
Diluted
EPS
|
|
Effective Tax
Rate
|
GAAP
|
|
$
|
4,386.3
|
|
|
75.4
|
%
|
|
$
|
897.6
|
|
|
$
|
823.4
|
|
|
$
|
1.30
|
|
|
10.2
|
%
|
Non-GAAP
adjustments: (A)
|
|
|
|
|
|
|
|
|
|
|
|
|
Litigation
settlement
|
|
—
|
|
|
—
|
|
|
367.9
|
|
|
305.1
|
|
|
0.48
|
|
|
1.9
|
|
Intellectual property
litigation expenses
|
|
—
|
|
|
—
|
|
|
37.5
|
|
|
28.5
|
|
|
0.05
|
|
|
0.5
|
|
Change in fair value
of contingent consideration liabilities, net
|
|
—
|
|
|
—
|
|
|
13.6
|
|
|
12.3
|
|
|
0.02
|
|
|
—
|
|
Amortization of
intangible assets
|
|
—
|
|
|
0.1
|
|
|
5.4
|
|
|
4.6
|
|
|
0.01
|
|
|
(0.1)
|
|
Adjusted
|
|
$
|
4,386.3
|
|
|
75.5
|
%
|
|
$
|
1,322.0
|
|
|
$
|
1,173.9
|
|
|
$
|
1.86
|
|
|
12.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, 2019
|
|
|
Net
Sales
|
|
Gross Profit
Margin
|
|
Operating
Income
|
|
Net
Income
|
|
Diluted
EPS (C)
|
|
Effective Tax
Rate
|
GAAP
|
|
$
|
4,348.0
|
|
|
74.4
|
%
|
|
$
|
1,146.8
|
|
|
$
|
1,046.9
|
|
|
$
|
1.64
|
|
|
10.3
|
%
|
Non-GAAP
adjustments: (A) (B)
|
|
|
|
|
|
|
|
|
|
|
|
|
TAVR inventory write
off
|
|
—
|
|
|
1.7
|
|
|
73.1
|
|
|
55.2
|
|
|
0.09
|
|
|
1.0
|
|
Impairment of
long-lived assets
|
|
—
|
|
|
—
|
|
|
40.6
|
|
|
40.6
|
|
|
0.06
|
|
|
(0.5)
|
|
Intellectual property
litigation expenses
|
|
—
|
|
|
—
|
|
|
33.4
|
|
|
25.2
|
|
|
0.04
|
|
|
0.4
|
|
Change in fair value
of contingent consideration liabilities, net
|
|
—
|
|
|
—
|
|
|
(6.1)
|
|
|
(7.1)
|
|
|
(0.01)
|
|
|
0.1
|
|
Amortization of
intangible assets
|
|
—
|
|
|
0.1
|
|
|
4.6
|
|
|
4.0
|
|
|
0.01
|
|
|
(0.1)
|
|
Purchase of
intellectual property
|
|
—
|
|
|
—
|
|
|
24.0
|
|
|
18.1
|
|
|
0.03
|
|
|
0.3
|
|
Adjusted
|
|
$
|
4,348.0
|
|
|
76.2
|
%
|
|
$
|
1,316.4
|
|
|
$
|
1,182.9
|
|
|
$
|
1.86
|
|
|
11.5
|
%
|
|
|
|
|
|
|
(A)
|
See description of
non-GAAP adjustments on the "Non-GAAP Financial Information"
page.
|
(B)
|
The tax effect on
non-GAAP adjustments is calculated based upon the impact of the
relevant tax jurisdictions' statutory tax
rates on the Company's estimated annual effective tax rate, or
discrete rate in the quarter, as applicable. The impact on
the
effective tax rate is reflected on each individual non-GAAP
adjustment line item.
|
(C)
|
All per share amounts
were adjusted for the May 29, 2020 three-for-one stock
split.
|
(D)
|
Quarterly adjustment
required to spread the full year tax impact of previously reported
items.
|
RECONCILIATION OF
SALES BY PRODUCT GROUP AND REGION
|
|
|
|
|
|
|
|
|
|
|
|
2019 Adjusted
|
|
|
Sales by Product Group (QTD)
|
|
4Q
2020
|
|
4Q
2019
|
|
Change
|
|
GAAP
Growth
Rate*
|
|
CASMED
Acquisition
|
|
FX
Impact
|
|
4Q 2019
Adjusted
Sales
|
|
Underlying
Growth
Rate *
|
Transcatheter
Aortic Valve Replacement
|
|
$
|
776.2
|
|
|
$
|
762.5
|
|
|
$
|
13.7
|
|
|
1.8
|
%
|
|
$
|
—
|
|
|
$
|
11.1
|
|
|
$
|
773.6
|
|
|
0.3
|
%
|
Transcatheter
Mitral and Tricuspid Therapies
|
|
13.1
|
|
|
7.2
|
|
|
5.9
|
|
|
83.6
|
%
|
|
—
|
|
|
0.3
|
|
|
7.5
|
|
|
74.1
|
%
|
Surgical
Structural Heart
|
|
204.2
|
|
|
205.1
|
|
|
(0.9)
|
|
|
(0.5)
|
%
|
|
—
|
|
|
3.9
|
|
|
209.0
|
|
|
(2.2)
|
%
|
Critical
Care
|
|
198.2
|
|
|
199.3
|
|
|
(1.1)
|
|
|
(0.6)
|
%
|
|
—
|
|
|
2.9
|
|
|
202.2
|
|
|
(2.0)
|
%
|
Total
|
|
$
|
1,191.7
|
|
|
$
|
1,174.1
|
|
|
$
|
17.6
|
|
|
1.5
|
%
|
|
$
|
—
|
|
|
$
|
18.2
|
|
|
$
|
1,192.3
|
|
|
(0.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 Adjusted
|
|
|
Sales by Product Group (YTD)
|
|
YTD 4Q
2020
|
|
YTD 4Q
2019
|
|
Change
|
|
GAAP
Growth
Rate*
|
|
CASMED
Acquisition
|
|
FX
Impact
|
|
YTD 4Q 2019
Adjusted
Sales
|
|
Underlying
Growth
Rate *
|
Transcatheter
Aortic Valve Replacement
|
|
$
|
2,857.3
|
|
|
$
|
2,737.9
|
|
|
$
|
119.4
|
|
|
4.4
|
%
|
|
$
|
—
|
|
|
$
|
5.0
|
|
|
$
|
2,742.9
|
|
|
4.2
|
%
|
Transcatheter
Mitral and Tricuspid Therapies
|
|
41.8
|
|
|
28.2
|
|
|
13.6
|
|
|
48.5
|
%
|
|
—
|
|
|
0.4
|
|
|
28.6
|
|
|
46.2
|
%
|
Surgical
Structural Heart
|
|
761.8
|
|
|
841.7
|
|
|
(79.9)
|
|
|
(9.5)
|
%
|
|
—
|
|
|
1.0
|
|
|
842.7
|
|
|
(9.6)
|
%
|
Critical
Care
|
|
725.4
|
|
|
740.2
|
|
|
(14.8)
|
|
|
(2.0)
|
%
|
|
7.5
|
|
|
(1.5)
|
|
|
746.2
|
|
|
(2.8)
|
%
|
Total
|
|
$
|
4,386.3
|
|
|
$
|
4,348.0
|
|
|
$
|
38.3
|
|
|
0.9
|
%
|
|
$
|
7.5
|
|
|
$
|
4.9
|
|
|
$
|
4,360.4
|
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 Adjusted
|
|
|
Sales by Region (QTD)
|
|
4Q
2020
|
|
4Q
2019
|
|
Change
|
|
GAAP
Growth
Rate*
|
|
CASMED
Acquisition
|
|
FX
Impact
|
|
4Q 2019
Adjusted
Sales
|
|
Underlying
Growth
Rate *
|
United
States
|
|
$
|
671.2
|
|
|
$
|
697.2
|
|
|
$
|
(26.0)
|
|
|
(3.7)
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
697.2
|
|
|
(3.7)
|
%
|
Europe
|
|
265.8
|
|
|
242.2
|
|
|
23.6
|
|
|
9.7
|
%
|
|
—
|
|
|
14.6
|
|
|
256.8
|
|
|
3.6
|
%
|
Japan
|
|
129.4
|
|
|
120.3
|
|
|
9.1
|
|
|
7.7
|
%
|
|
—
|
|
|
3.9
|
|
|
124.2
|
|
|
4.3
|
%
|
Rest of
World
|
|
125.3
|
|
|
114.4
|
|
|
10.9
|
|
|
9.5
|
%
|
|
—
|
|
|
(0.3)
|
|
|
114.1
|
|
|
9.9
|
%
|
International
|
|
520.5
|
|
|
476.9
|
|
|
43.6
|
|
|
9.2
|
%
|
|
—
|
|
|
18.2
|
|
|
495.1
|
|
|
5.3
|
%
|
Total
|
|
$
|
1,191.7
|
|
|
$
|
1,174.1
|
|
|
$
|
17.6
|
|
|
1.5
|
%
|
|
$
|
—
|
|
|
$
|
18.2
|
|
|
$
|
1,192.3
|
|
|
(0.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 Adjusted
|
|
|
Sales by Region (YTD)
|
|
YTD 4Q
2020
|
|
YTD 4Q
2019
|
|
Change
|
|
GAAP
Growth
Rate*
|
|
CASMED
Acquisition
|
|
FX
Impact
|
|
YTD 4Q 2019
Adjusted
Sales
|
|
Underlying
Growth
Rate *
|
United
States
|
|
$
|
2,516.8
|
|
|
$
|
2,532.7
|
|
|
$
|
(15.9)
|
|
|
(0.6)
|
%
|
|
$
|
6.7
|
|
|
$
|
—
|
|
|
$
|
2,539.4
|
|
|
(0.9)
|
%
|
Europe
|
|
973.6
|
|
|
941.2
|
|
|
32.4
|
|
|
3.4
|
%
|
|
0.4
|
|
|
9.4
|
|
|
951.0
|
|
|
2.4
|
%
|
Japan
|
|
460.1
|
|
|
444.7
|
|
|
15.4
|
|
|
3.5
|
%
|
|
0.2
|
|
|
8.1
|
|
|
453.0
|
|
|
1.6
|
%
|
Rest of
World
|
|
435.8
|
|
|
429.4
|
|
|
6.4
|
|
|
1.5
|
%
|
|
0.2
|
|
|
(12.6)
|
|
|
417.0
|
|
|
4.5
|
%
|
International
|
|
1,869.5
|
|
|
1,815.3
|
|
|
54.2
|
|
|
3.0
|
%
|
|
0.8
|
|
|
4.9
|
|
|
1,821.0
|
|
|
2.7
|
%
|
Total
|
|
$
|
4,386.3
|
|
|
$
|
4,348.0
|
|
|
$
|
38.3
|
|
|
0.9
|
%
|
|
$
|
7.5
|
|
|
$
|
4.9
|
|
|
$
|
4,360.4
|
|
|
0.6
|
%
|
|
|
* Numbers may not
calculate due to rounding.
|
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SOURCE Edwards Lifesciences Corporation