IRVINE, Calif., Oct. 24, 2017 /PRNewswire/ -- Edwards
Lifesciences Corporation (NYSE: EW), the global leader in
patient-focused innovations for structural heart disease and
critical care monitoring, today reported financial results for the
quarter ended September 30, 2017.
Third Quarter Highlights:
- Sales grew 11 percent; or an underlying1 13
percent
- Global THVT sales grew 17 percent; adjusted sales increased 20
percent
- THVT U.S. sales grew 20 percent; OUS sales grew 13 percent, or
an underlying 21 percent
- EPS grew 22 percent; adjusted EPS grew 24 percent
- Reaffirmed 2017 adjusted sales and EPS guidance
- Introduced SAPIEN 3 Ultra System
"We are pleased to report strong third quarter performance that
delivered double-digit overall organic growth driven by robust
sales of innovative therapies. Sales were in line with our
expectations and were lifted by 20 percent global underlying growth
in TAVR. And, we continue to aggressively pursue breakthrough
structural heart therapies with the potential to drive significant
future growth and help an even broader group of patients," said
Michael A. Mussallem, chairman and
CEO. "While we are assisting a number of our employees who
were personally affected by the recent natural disasters, we were
fortunate to have experienced minimal business impact."
Third Quarter 2017 Results
Sales for the quarter ended
September 30, 2017 were $821.5
million, up 11.1 percent. Including the consumption of
$17.0 million of stocking inventory
in Germany, adjusted sales were
$838.5 million, up 12.9 percent over
the third quarter last year. Net income for the quarter ended
September 30, 2017 was $170.1
million, or $0.79 per
share. Adjusted EPS grew 23.5 percent to $0.84. Adjusted EPS would have been
$0.88 this quarter based on the
excess tax benefit estimated in previous guidance.2
For the quarter, the company reported Transcatheter Heart Valve
Therapy (THVT) sales of $481.2
million, a 17.3 percent growth rate over the third quarter
last year. Adjusted THVT sales were $498.2
million, up 20.5 percent on an underlying basis. Growth was
strong both inside and outside the U.S. driven by continued therapy
adoption and is consistent with the company's expectation of a
$5-plus billion opportunity by
2021. The company recently introduced its CE Mark-pending
SAPIEN 3 Ultra System at the PCR London Valves meeting. This
system features advancements designed to help TAVR heart teams
simplify procedures, save time and reduce potential
complications.
In the U.S., THVT sales for the quarter were $311.6 million, a 20.1 percent growth rate over
the third quarter last year. "Strong therapy adoption
continued to fuel an increase in procedures broadly across our
network of hospitals, led by our best-in-class SAPIEN 3 valve,"
said Mussallem.
Surgical Heart Valve Therapy sales for the quarter were
$195.6 million, up 2.4 percent
compared to the third quarter last year, or up 2.2 percent on an
underlying basis. Growth was driven by strong performance of
the INTUITY Elite valve system and solid growth in core products
outside the U.S. This growth was partially offset by the
continuing shift from the company's surgical aortic valves to
SAPIEN 3 valves in the U.S. and Europe.
Critical Care sales were $144.7
million for the quarter, representing an increase of 4.5
percent versus last year, or 5.2 percent on an underlying
basis. This performance was driven by solid growth of core
products and the Enhanced Surgical Recovery program, particularly
in the U.S. and Asia Pacific.
For the quarter, the company's gross profit margin was 74.0
percent, compared to 72.8 percent in the same period last year.
This improvement primarily reflects the benefit of a more
profitable business mix, led by growing sales of TAVR, as well as a
favorable comparison of supply chain expenses. Partially
offsetting these benefits were expenses associated with flooding
from Hurricane Maria in Puerto
Rico and the planned closure of the company's manufacturing
plant in Switzerland.
Selling, general and administrative expenses increased 6.5
percent to $244.6 million for the
quarter. This increase was driven by personnel and sales
related expenses primarily in support of the transcatheter heart
valve therapy product line.
Research and development investments for the third quarter
increased 26.5 percent to $142.9
million. This increase was primarily the result of
continued investments in mitral and aortic transcatheter valve
programs.
Cash flow from operating activities for the third quarter was
$310.8 million. After capital
spending of $42.3 million, free cash
flow was $268.5 million.
Cash, cash equivalents and short-term investments totaled
$1.4 billion at September 30,
2017. Total debt was $1.0
billion.
Outlook
For the full year 2017, the company reaffirmed
its full year sales estimate at the high end of its $3.2 to $3.4 billion guidance and its estimate
for 2017 adjusted earnings per share of $3.65 to $3.85.
For the fourth quarter 2017, at current foreign exchange rates,
the company projects adjusted sales to be between $855 and $895 million, and adjusted EPS to be
between $0.84 and $0.94.
"We are very pleased with the performance achieved across all of
our product lines and believe our future remains bright. Our
innovative TAVR therapies continued to deliver value to
patients. And our transcatheter mitral and tricuspid valve
technologies continue to represent exciting opportunities for
breakthrough therapies. Overall, we are confident that our
valuable innovations will result in a continued strong outlook as
we deliver important solutions for the patients we serve."
About Edwards Lifesciences
Edwards Lifesciences, based in Irvine,
Calif., is the global leader in patient-focused medical
innovations for structural heart disease, as well as critical care
and surgical monitoring. Driven by a passion to help patients, the
company collaborates with the world's leading clinicians and
researchers to address unmet healthcare needs, working to improve
patient outcomes and enhance lives. For more information, visit
www.Edwards.com and follow us on Twitter @EdwardsLifesci.
Conference Call and Webcast Information
Edwards Lifesciences will be hosting a conference call today at
2:00 p.m. PT to discuss its third 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 13670702. 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. A live stream and archived replay can also be
accessed via mobile devices by downloading Edwards' IR App for
iPhone and iPad or Android.
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," "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, the potential TAVR
opportunity size, fourth quarter and full year 2017 financial
guidance, and information in the Outlook section.
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 and difficult to
predict. 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 uncertainties associated with the timing and
pace of therapy adoption, particularly in THVT; unpredictability of
the effectiveness and timing of new product launches; competitive
dynamics; the timing and extent of regulatory approvals and
reimbursement levels 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, particularly
in our THVT patent litigation; unpredictability of changes in
accounting standards; and other risks detailed in the company's
filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K for the year ended December 31,
2016. These filings, along with important safety information about
our products, may be found at edwards.com.
Edwards, Edwards Lifesciences, the stylized E logo, EDWARDS
INTUITY, EDWARDS INTUITY Elite, Edwards SAPIEN, Edwards SAPIEN 3,
Enhanced Surgical Recovery program, SAPIEN, SAPIEN 3, and SAPIEN 3
Ultra are trademarks of Edwards Lifesciences Corporation. All other
trademarks are the property of their respective owners. The
Edwards SAPIEN 3 Ultra System is not currently available for
commercial sale in any country.
__________________
|
[1]
|
"Adjusted" amounts
are non-GAAP items. Adjusted sales, or "underlying" growth
rates, in this press release exclude foreign exchange fluctuations
and sales return reserves associated with THVT product
upgrades. Adjusted sales and "underlying" growth rates also
exclude the positive impact of THVT stocking sales in Germany, and
the negative impact of de-stocking. Adjusted earnings per
share is a non-GAAP item computed on a diluted basis and in this
press release excludes impairment of long-lived assets,
intellectual property litigation expenses, amortization of
intellectual property, fair value adjustments to contingent
consideration liabilities arising from acquisitions, and
realignment expenses. Adjusted earnings per share also excludes the
positive impact of THVT stocking sales in Germany, and the negative
impact of de-stocking. See the Non-GAAP Financial Information
page and reconciliation tables below.
|
[2]
|
The impact of the new
accounting for the excess tax benefit related to employee
stock-based compensation for the quarter benefited adjusted EPS by
$0.04 less than was forecasted in guidance. Adjusted EPS
would have been $0.88 based on the original estimate.
|
EDWARDS
LIFESCIENCES CORPORATION
|
Unaudited
Consolidated Statements of Operations
|
(in millions, except per share data)
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net sales
|
$
|
821.5
|
|
|
$
|
739.4
|
|
|
$
|
2,546.8
|
|
|
$
|
2,196.0
|
|
Cost of
sales
|
213.3
|
|
|
201.4
|
|
|
640.0
|
|
|
584.2
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
608.2
|
|
|
538.0
|
|
|
1,906.8
|
|
|
1,611.8
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expenses
|
244.6
|
|
|
229.6
|
|
|
718.0
|
|
|
671.1
|
|
Research and
development expenses
|
142.9
|
|
|
113.0
|
|
|
406.0
|
|
|
327.3
|
|
Intellectual property
litigation expenses
|
13.7
|
|
|
6.5
|
|
|
31.6
|
|
|
27.8
|
|
Change in fair value
of contingent consideration liabilities
|
(16.7)
|
|
|
0.1
|
|
|
(12.5)
|
|
|
1.1
|
|
Special
charges
|
10.2
|
|
|
—
|
|
|
41.4
|
|
|
34.5
|
|
Interest expense,
net
|
0.1
|
|
|
2.1
|
|
|
3.9
|
|
|
6.9
|
|
Other expense,
net
|
1.6
|
|
|
1.5
|
|
|
7.4
|
|
|
5.6
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
211.8
|
|
|
185.2
|
|
|
711.0
|
|
|
537.5
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
41.7
|
|
|
43.8
|
|
|
124.6
|
|
|
126.5
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
170.1
|
|
|
$
|
141.4
|
|
|
$
|
586.4
|
|
|
$
|
411.0
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.81
|
|
|
$
|
0.66
|
|
|
$
|
2.78
|
|
|
$
|
1.93
|
|
Diluted
|
$
|
0.79
|
|
|
$
|
0.65
|
|
|
$
|
2.71
|
|
|
$
|
1.89
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
211.3
|
|
|
213.2
|
|
|
211.0
|
|
|
212.8
|
|
Diluted
|
216.2
|
|
|
218.1
|
|
|
216.1
|
|
|
217.7
|
|
|
|
|
|
|
|
|
|
Operating
statistics
|
|
|
|
|
|
|
|
As a percentage of
net sales:
|
|
|
|
|
|
|
|
Gross
profit
|
74.0
|
%
|
|
72.8
|
%
|
|
74.9
|
%
|
|
73.4
|
%
|
Selling, general, and
administrative expenses
|
29.8
|
%
|
|
31.1
|
%
|
|
28.2
|
%
|
|
30.6
|
%
|
Research and
development expenses
|
17.4
|
%
|
|
15.3
|
%
|
|
15.9
|
%
|
|
14.9
|
%
|
Income before
provision for income taxes
|
25.8
|
%
|
|
25.0
|
%
|
|
27.9
|
%
|
|
24.5
|
%
|
Net income
|
20.7
|
%
|
|
19.1
|
%
|
|
23.0
|
%
|
|
18.7
|
%
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
19.7
|
%
|
|
23.7
|
%
|
|
17.5
|
%
|
|
23.5
|
%
|
____________________
|
Note: Numbers may not
calculate due to rounding.
|
EDWARDS
LIFESCIENCES CORPORATION
|
Unaudited Balance
Sheets
|
(in
millions)
|
|
|
September 30,
2017
|
|
December 31,
2016
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
630.3
|
|
|
$
|
930.1
|
|
Short-term
investments
|
772.5
|
|
|
341.0
|
|
Accounts and other
receivables, net
|
475.0
|
|
|
414.6
|
|
Inventories,
net
|
538.4
|
|
|
396.6
|
|
Prepaid
expenses
|
52.8
|
|
|
45.9
|
|
Other current
assets
|
97.4
|
|
|
111.8
|
|
Total current
assets
|
2,566.4
|
|
|
2,240.0
|
|
|
|
|
|
Long-term
investments
|
567.5
|
|
|
532.1
|
|
Property, plant, and
equipment, net
|
649.6
|
|
|
580.0
|
|
Goodwill
|
980.5
|
|
|
626.1
|
|
Other intangible
assets, net
|
414.9
|
|
|
204.8
|
|
Deferred income
taxes
|
197.1
|
|
|
203.8
|
|
Other
assets
|
112.4
|
|
|
123.2
|
|
|
|
|
|
Total
assets
|
$
|
5,488.4
|
|
|
$
|
4,510.0
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
693.7
|
|
|
$
|
532.5
|
|
Contingent
consideration liabilities
|
41.5
|
|
|
—
|
|
Total current
liabilities
|
735.2
|
|
|
532.5
|
|
|
|
|
|
Long-term
debt
|
1,034.0
|
|
|
822.3
|
|
Contingent
consideration liabilities
|
140.5
|
|
|
31.6
|
|
Other long-term
liabilities
|
416.2
|
|
|
504.6
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Common
stock
|
211.6
|
|
|
242.6
|
|
Additional paid-in
capital
|
1,129.5
|
|
|
1,167.8
|
|
Retained
earnings
|
1,964.9
|
|
|
3,906.3
|
|
Accumulated other
comprehensive loss
|
(142.7)
|
|
|
(198.4)
|
|
Treasury stock, at
cost
|
(0.8)
|
|
|
(2,499.3)
|
|
Total stockholders'
equity
|
3,162.5
|
|
|
2,619.0
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
5,488.4
|
|
|
$
|
4,510.0
|
|
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 fluctuations,
adjustments for discontinued and acquired products, sales return
reserves associated with transcatheter heart valve therapy ("THVT")
product upgrades, and the positive impact of THVT stocking sales in
Germany and the negative impact of de-stocking. The Company uses
the term "adjusted" to also exclude intellectual property
litigation expenses, amortization of intellectual property, fair
value adjustments to contingent consideration liabilities arising
from acquisitions, gains and losses from significant investments,
impairments, litigation, the positive impact of THVT stocking sales
in Germany and the negative impact of de-stocking, realignment
expenses, sales return reserves and related costs associated with
THVT product upgrades, and business development transactions.
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 below due to the inherent difficulty in
forecasting such items. 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.
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.
The items described below are adjustments to the GAAP
financial results in the reconciliations that follow:
THVT Germany Stocking Sales - In the first quarter of
2017, the Company recorded $61.8
million in net stocking sales ($48.0
million, net of related costs) to customers in Germany, as these customers elected to
purchase additional inventory in anticipation of a potential supply
interruption resulting from recent intellectual property
litigation. In the second and third quarters of 2017, these
customers consumed on a net basis $22.5
million ($17.9 million, net of
related costs) and $17.0 million
($13.3 million, net of related
costs), respectively, of their stocking inventory.
THVT Sales Return Reserve and Related Costs - In the
first quarter of 2016, the Company recorded a $1.7 million reversal of its sales return reserve
($1.5 million, net of related costs)
upon delivery of the next-generation THVT products in the United States. In addition, in the
first quarter of 2016, the Company recorded inventory reserves of
$1.6 million related to estimated
excess THVT inventory expected upon introduction of next-generation
THVT products in Japan.
Intellectual Property Litigation Expenses - The Company
incurred intellectual property litigation expenses of $10.2 million and $12.2
million in the first quarter of 2017 and 2016, respectively,
$7.7 million and $9.1 million in the second quarter of 2017 and
2016, respectively, and $13.7 million
and $6.5 million in the third quarter
of 2017 and 2016, respectively.
Amortization of Intellectual Property - The Company
recorded amortization expense of $2.1
million and $1.7 million in
the first quarter of 2017 and 2016, respectively, $2.0 million and $1.9
million in the second quarter of 2017 and 2016,
respectively, and $2.1 million and
$2.0 million in the third quarter of
2017 and 2016, respectively, related to intellectual property.
Change in Fair Value of Contingent Consideration
Liabilities - The Company recorded expenses of $1.1 million and $0.6
million in the first quarter of 2017 and 2016, respectively,
$3.1 million and $0.4 million in the second quarter of 2017 and
2016, respectively, and a gain of $16.7
million and expenses of $0.1
million in the third quarter of 2017 and 2016, respectively,
related to changes in the fair value of its contingent
consideration liabilities arising from acquisitions.
Impairment of Long-lived Assets - The Company recorded a
$31.2 million charge in the second
quarter of 2017 related to the other-than-temporary impairment of
one of its cost method investments and an associated long-term
asset related to the Company's option to acquire this investee.
Realignment Expenses - The Company recorded a
$10.2 million charge in the third
quarter of 2017 related to severance expenses and other costs
associated with the planned closure of its manufacturing plant in
Switzerland.
Purchased In-process Research and Development
("IPR&D") - The Company recorded a $34.5 million charge in the second quarter of
2016 related to the acquisition of technology for use in its
transcatheter heart valve programs.
Provision for Income Taxes - The income tax impact of the
expenses and gains discussed above is based upon forecasted items
affecting 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 data)
|
|
RECONCILIATION OF
GAAP TO ADJUSTED NET INCOME
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP Net
Income
|
|
$
|
170.1
|
|
|
$
|
141.4
|
|
|
$
|
586.4
|
|
|
$
|
411.0
|
|
Growth Rate
%
|
|
20.3
|
%
|
|
|
|
42.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments:
(A)
|
|
|
|
|
|
|
|
|
THVT Germany stocking
sales
|
|
13.3
|
|
|
—
|
|
|
(16.8)
|
|
|
—
|
|
THVT sales return
reserve and related costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
Intellectual property
litigation expenses
|
|
13.7
|
|
|
6.5
|
|
|
31.6
|
|
|
27.8
|
|
Amortization of
intellectual property
|
|
2.1
|
|
|
2.0
|
|
|
6.2
|
|
|
5.6
|
|
Change in fair value
of contingent consideration liabilities
|
|
(16.7)
|
|
|
0.1
|
|
|
(12.5)
|
|
|
1.1
|
|
Impairment of
long-lived assets
|
|
—
|
|
|
—
|
|
|
31.2
|
|
|
—
|
|
Realignment
expenses
|
|
10.2
|
|
|
—
|
|
|
10.2
|
|
|
—
|
|
Purchased
IPR&D
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34.5
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
|
|
|
|
|
|
Tax effect on
reconciling items (B)
|
|
(9.2)
|
|
|
(3.4)
|
|
|
(18.0)
|
|
|
(14.3)
|
|
Ongoing tax impact of
second quarter 2017 impairment of long-lived assets
|
|
(1.7)
|
|
|
—
|
|
|
(1.7)
|
|
|
—
|
|
Ongoing tax impact of
second quarter 2016 purchased IPR&D
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
1.7
|
|
Adjusted Net
Income
|
|
$
|
181.8
|
|
|
$
|
148.3
|
|
|
$
|
616.6
|
|
|
$
|
467.5
|
|
Growth Rate
%
|
|
22.6
|
%
|
|
|
|
31.9
|
%
|
|
|
RECONCILIATION OF
GAAP TO ADJUSTED DILUTED EARNINGS PER SHARE
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP Diluted
Earnings Per Share
|
|
$
|
0.79
|
|
|
$
|
0.65
|
|
|
$
|
2.71
|
|
|
$
|
1.89
|
|
Growth Rate
%
|
|
21.5
|
%
|
|
|
|
43.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments:
(A), (C)
|
|
|
|
|
|
|
|
|
THVT Germany stocking
sales
|
|
0.05
|
|
|
—
|
|
|
(0.06)
|
|
|
—
|
|
Intellectual property
litigation expenses
|
|
0.04
|
|
|
0.02
|
|
|
0.10
|
|
|
0.09
|
|
Amortization of
intellectual property
|
|
0.01
|
|
|
—
|
|
|
0.02
|
|
|
0.02
|
|
Change in fair value
of contingent consideration liabilities
|
|
(0.08)
|
|
|
—
|
|
|
(0.05)
|
|
|
—
|
|
Impairment of
long-lived assets
|
|
—
|
|
|
—
|
|
|
0.10
|
|
|
—
|
|
Realignment
expenses
|
|
0.04
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
Purchased
IPR&D
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.14
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
|
|
|
|
|
|
Ongoing tax impact of
second quarter 2017 impairment of long-lived assets
|
|
(0.01)
|
|
|
—
|
|
|
(0.01)
|
|
|
—
|
|
Ongoing tax impact of
second quarter 2016 purchased IPR&D
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.01
|
|
Adjusted Diluted
Earnings Per Share
|
|
$
|
0.84
|
|
|
$
|
0.68
|
|
|
$
|
2.85
|
|
|
$
|
2.15
|
|
Growth Rate
%
|
|
23.5
|
%
|
|
|
|
32.6
|
%
|
|
|
___________________
|
Note: Numbers may not
calculate due to rounding.
|
|
(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 tax effect on the THVT Germany
stocking sales adjustment is calculated using the global effective
tax rate.
|
|
|
(C)
|
All amounts are tax
effected, 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.
|
THVT UNDERLYING
SALES GROWTH OUTSIDE THE UNITED STATES
|
|
|
|
Three Months
Ended September 30,
|
(in millions)
|
|
2017
|
|
2016
|
GAAP THVT Sales
Outside the United States
|
|
$
|
169.6
|
|
|
$
|
150.6
|
|
Adjustment for THVT
Germany stocking sales
|
|
17.0
|
|
|
—
|
|
Foreign exchange
impact
|
|
—
|
|
|
3.5
|
|
THVT Underlying
Sales Outside the United States
|
|
$
|
186.6
|
|
|
$
|
154.1
|
|
Underlying Growth
Rate %
|
|
21.1
|
%
|
|
|
EDWARDS
LIFESCIENCES CORPORATION
|
Unaudited
Reconciliation of GAAP to Non-GAAP Financial
Information
|
($ in
millions)
|
|
RECONCILIATION OF
SALES BY PRODUCT GROUP AND REGION
|
|
|
|
|
|
|
|
|
|
|
|
2017 Adjusted
|
|
2016 Adjusted
|
|
|
Sales by Product Group (QTD)
|
|
3Q
2017
|
|
3Q
2016
|
|
Change
|
|
GAAP
Growth
Rate*
|
|
Germany
Stocking
|
|
3Q 2017
Adjusted
Sales
|
|
Sales Return
Reserve
|
|
FX Impact
|
|
3Q 2016
Adjusted
Sales
|
|
Underlying
Growth
Rate *
|
Transcatheter
Heart Valve Therapy
|
|
$
|
481.2
|
|
|
$
|
410.1
|
|
|
$
|
71.1
|
|
|
17.3
|
%
|
|
$
|
17.0
|
|
|
$
|
498.2
|
|
|
$
|
—
|
|
|
$
|
3.5
|
|
|
$
|
413.6
|
|
|
20.5
|
%
|
Surgical Heart
Valve Therapy
|
|
195.6
|
|
|
190.9
|
|
|
4.7
|
|
|
2.4
|
%
|
|
—
|
|
|
195.6
|
|
|
—
|
|
|
0.5
|
|
|
191.4
|
|
|
2.2
|
%
|
Critical
Care
|
|
144.7
|
|
|
138.4
|
|
|
6.3
|
|
|
4.5
|
%
|
|
—
|
|
|
144.7
|
|
|
—
|
|
|
(0.8)
|
|
|
137.6
|
|
|
5.2
|
%
|
Total
|
|
$
|
821.5
|
|
|
$
|
739.4
|
|
|
$
|
82.1
|
|
|
11.1
|
%
|
|
$
|
17.0
|
|
|
$
|
838.5
|
|
|
$
|
—
|
|
|
$
|
3.2
|
|
|
$
|
742.6
|
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Adjusted
|
|
2016 Adjusted
|
|
|
Sales by Product Group (YTD)
|
|
YTD
3Q 2017
|
|
YTD
3Q 2016
|
|
Change
|
|
GAAP
Growth
Rate*
|
|
Germany
Stocking
|
|
YTD 3Q
2017
Adjusted
Sales
|
|
Sales Return
Reserve
|
|
FX Impact
|
|
YTD 3Q
2016
Adjusted
Sales
|
|
Underlying
Growth
Rate *
|
Transcatheter
Heart Valve Therapy
|
|
$
|
1,507.9
|
|
|
$
|
1,196.5
|
|
|
$
|
311.4
|
|
|
26.0
|
%
|
|
$
|
(22.3)
|
|
|
$
|
1,485.6
|
|
|
$
|
(1.7)
|
|
|
$
|
(5.4)
|
|
|
$
|
1,189.4
|
|
|
24.9
|
%
|
Surgical Heart
Valve Therapy
|
|
602.2
|
|
|
585.5
|
|
|
16.7
|
|
|
2.9
|
%
|
|
—
|
|
|
602.2
|
|
|
—
|
|
|
(3.7)
|
|
|
581.8
|
|
|
3.5
|
%
|
Critical
Care
|
|
436.7
|
|
|
414.0
|
|
|
22.7
|
|
|
5.5
|
%
|
|
—
|
|
|
436.7
|
|
|
—
|
|
|
(3.0)
|
|
|
411.0
|
|
|
6.3
|
%
|
Total
|
|
$
|
2,546.8
|
|
|
$
|
2,196.0
|
|
|
$
|
350.8
|
|
|
16.0
|
%
|
|
$
|
(22.3)
|
|
|
$
|
2,524.5
|
|
|
$
|
(1.7)
|
|
|
$
|
(12.1)
|
|
|
$
|
2,182.2
|
|
|
15.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Adjusted
|
|
2016 Adjusted
|
|
|
Sales by Region (QTD)
|
|
3Q
2017
|
|
3Q
2016
|
|
Change
|
|
GAAP
Growth
Rate*
|
|
Germany
Stocking
|
|
3Q 2017
Adjusted
Sales
|
|
Sales Return
Reserve
|
|
FX Impact
|
|
3Q 2016
Adjusted
Sales
|
|
Underlying
Growth
Rate *
|
United
States
|
|
$
|
470.4
|
|
|
$
|
417.1
|
|
|
$
|
53.3
|
|
|
12.8
|
%
|
|
$
|
—
|
|
|
$
|
470.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
417.1
|
|
|
12.8
|
%
|
Europe
|
|
182.3
|
|
|
172.3
|
|
|
10.0
|
|
|
5.9
|
%
|
|
17.0
|
|
|
199.3
|
|
|
—
|
|
|
7.8
|
|
|
180.1
|
|
|
10.7
|
%
|
Japan
|
|
83.2
|
|
|
79.8
|
|
|
3.4
|
|
|
4.2
|
%
|
|
—
|
|
|
83.2
|
|
|
—
|
|
|
(6.2)
|
|
|
73.6
|
|
|
13.0
|
%
|
Rest of
World
|
|
85.6
|
|
|
70.2
|
|
|
15.4
|
|
|
21.8
|
%
|
|
—
|
|
|
85.6
|
|
|
—
|
|
|
1.6
|
|
|
71.8
|
|
|
19.2
|
%
|
International
|
|
351.1
|
|
|
322.3
|
|
|
28.8
|
|
|
8.9
|
%
|
|
17.0
|
|
|
368.1
|
|
|
—
|
|
|
3.2
|
|
|
325.5
|
|
|
13.1
|
%
|
Total
|
|
$
|
821.5
|
|
|
$
|
739.4
|
|
|
$
|
82.1
|
|
|
11.1
|
%
|
|
$
|
17.0
|
|
|
$
|
838.5
|
|
|
$
|
—
|
|
|
$
|
3.2
|
|
|
$
|
742.6
|
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Adjusted
|
|
2016 Adjusted
|
|
|
Sales by Region (YTD)
|
|
YTD
3Q 2017
|
|
YTD
3Q 2016
|
|
Change
|
|
GAAP
Growth
Rate*
|
|
Germany
Stocking
|
|
YTD 3Q
2017
Adjusted
Sales
|
|
Sales Return
Reserve
|
|
FX Impact
|
|
YTD 3Q
2016
Adjusted
Sales
|
|
Underlying
Growth
Rate *
|
United
States
|
|
$
|
1,413.9
|
|
|
$
|
1,194.2
|
|
|
$
|
219.7
|
|
|
18.4
|
%
|
|
$
|
—
|
|
|
$
|
1,413.9
|
|
|
$
|
(1.7)
|
|
|
$
|
—
|
|
|
$
|
1,192.5
|
|
|
18.6
|
%
|
Europe
|
|
627.0
|
|
|
564.4
|
|
|
62.6
|
|
|
11.1
|
%
|
|
(22.3)
|
|
|
604.7
|
|
|
—
|
|
|
(6.9)
|
|
|
557.5
|
|
|
8.5
|
%
|
Japan
|
|
253.0
|
|
|
226.3
|
|
|
26.7
|
|
|
11.8
|
%
|
|
—
|
|
|
253.0
|
|
|
—
|
|
|
(7.5)
|
|
|
218.8
|
|
|
15.6
|
%
|
Rest of
World
|
|
252.9
|
|
|
211.1
|
|
|
41.8
|
|
|
19.8
|
%
|
|
—
|
|
|
252.9
|
|
|
—
|
|
|
2.3
|
|
|
213.4
|
|
|
18.5
|
%
|
International
|
|
1,132.9
|
|
|
1,001.8
|
|
|
131.1
|
|
|
13.1
|
%
|
|
(22.3)
|
|
|
1,110.6
|
|
|
—
|
|
|
(12.1)
|
|
|
989.7
|
|
|
12.2
|
%
|
Total
|
|
$
|
2,546.8
|
|
|
$
|
2,196.0
|
|
|
$
|
350.8
|
|
|
16.0
|
%
|
|
$
|
(22.3)
|
|
|
$
|
2,524.5
|
|
|
$
|
(1.7)
|
|
|
$
|
(12.1)
|
|
|
$
|
2,182.2
|
|
|
15.7
|
%
|
__________________
|
* Numbers may not
calculate due to rounding.
|
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SOURCE Edwards Lifesciences Corporation