MARLBOROUGH, Mass.,
July 29, 2020 /PRNewswire/
-- Boston Scientific Corporation (NYSE: BSX) generated sales
of $2.003 billion during the second
quarter of 2020. This represents a decline of (23.9) percent on a
reported basis, (23.1) percent on an operational1 basis
and (28.7) percent on an organic2 basis, all compared to
the prior year period. The company reported a GAAP loss of
$147 million or $(0.11) per share (EPS), compared to GAAP
earnings of $154 million or
$0.11 per share a year ago, and
achieved adjusted earnings per share of $0.08 for the period, compared to $0.39 a year ago.
"We remain focused on the safety of our team, our customers and
the patients they serve, and were pleased to see the business
recovering over the course of the quarter," said Mike Mahoney, chairman and chief executive
officer, Boston Scientific. "With a strong pipeline of
differentiated products and an agile global team, we'll continue to
execute on our strategy and make prudent decisions to position us
for success as deferred procedures resume."
Second quarter financial results and recent
developments:
- Reported a GAAP loss of $(0.11)
per share. Achieved adjusted earnings per share of $0.08. The company did not provide second quarter
sales and EPS guidance due to ongoing uncertainty associated with
the scope and duration of the COVID-19 pandemic.
- Second quarter sales declined in each of our reportable
segments4, compared to the prior year period:
-
- MedSurg: (29.6) percent reported, (29.1) percent operational
and (28.4) percent organic
- Rhythm and Neuro: (33.2) percent reported, (32.7) percent
operational and (33.4) percent organic
- Cardiovascular: (18.7) percent reported, (17.6) percent
operational and (25.3) percent organic
- Second quarter regional5 sales declined, compared to
the prior year period:
-
- U.S.: (28.4) percent reported and operational
- EMEA (Europe, Middle East and Africa): (27.2) percent reported and (25.6)
percent operational
- APAC (Asia-Pacific): (14.8)
percent reported and (14.0) percent operational
- Emerging Markets3: (19.7) percent reported and
(14.6) percent operational
- Received U.S. Food and Drug Administration (FDA) approval for
the WATCHMAN FLX™ Left Atrial Appendage Closure (LAAC)
Device which is indicated to reduce the risk of stroke in
patients with non-valvular atrial fibrillation. This
next-generation implant is the first LAAC device that can be fully
recaptured, repositioned and redeployed in the left atrial
appendage, with additional design features to enhance safety and
performance while treating a wider range of patient anatomies than
the previous WATCHMAN LAAC device.
- Received FDA approval for the SYNERGY™ XD Bioabsorbable
Polymer (BP) Drug-Eluting Stent (DES) System, the
next-generation SYNERGY BP-DES platform with the only 48 mm length
DES available in the U.S. and enhanced deliverability features to
enable improved arterial navigation in percutaneous coronary
intervention (PCI) cases. The system was recently launched in
Japan following approval from the
Japanese Pharmaceuticals and Medical Devices Agency (PMDA).
- Received FDA 510(k) clearance and began limited market release
for the LUX-Dx™ Insertable Cardiac Monitor (ICM) System, a
new, long-term diagnostic device implanted in patients to detect
arrythmias associated with conditions such as atrial fibrillation
(AF), cryptogenic stroke and syncope. The LUX-Dx ICM System can be
programmed remotely and have settings adjusted without requiring
patients to visit their physician's office and is designed with a
dual-stage algorithm that detects and then verifies potential
arrhythmias before an alert is sent to clinicians.
- Received approval for the Eluvia™ Drug-Eluting Vascular
Stent System from China's
Center for Medical Device Evaluation and will begin a limited
market release by the end of the year. Also announced results of a
sub-study of patients from the IMPERIAL trial who were treated with
the Eluvia stent during the 2020 Vascular Interventional Advances
(VIVA) Late-Breaking Clinical Trials Livestream event. Data
demonstrated the Eluvia stent offers durable and consistent results
in complex and long lesions, with an average lesion length of 162.8
mm and that patients treated with the Eluvia stent had a 77.2%
Kaplan-Meier primary patency rate, a 13.6% clinically-driven target
lesion revascularization rate and no stent thrombosis, despite
long, heavily calcified lesions.
- Received CE Mark and began limited European release for the
INTELLANAV STABLEPOINT™ Ablation Catheter enabled with
DIRECTSENSE™ Technology. This first-of-its-kind catheter
combines measures of mechanical contact, or contact force, with
local impedance to provide insight into the cardiac tissue's
response to ablation.
- Received Centers for Medicare & Medicaid Services (CMS)
approval for a new transitional pass-through (TPT) payment category
to describe single-use endoscopes, including the EXALT™ Model D
Single-Use Duodenoscope, to facilitate Medicare beneficiary
access to the advantages of new and innovative devices by allowing
for adequate payment while cost data is collected, starting
July 1, 2020. The EXALT™ duodenoscope
is the world's first and only single-use, flexible duodenoscope
cleared by the U.S. Food and Drug Administration (FDA), which
eliminates the risk of infection from inadequate scope reprocessing
between procedures.
- Presented positive findings from the largest reported clinical
experience to date with the LOTUS Edge™ Aortic Valve
System at TVT Connect. Data from a pre-specified interim
analysis of the first 50 patients enrolled in the European RESPOND
EDGE post-market registry demonstrated no reports of mortality, no
repeat procedures for valve-related dysfunction or
re-hospitalization for valve-related symptoms and excellent valve
hemodynamics, the lowest PVL rates in this valve category and a
reduced permanent pacemaker implantation rate in line with
competitive valves in real-world experience.
- Commenced enrollment of the FROZEN-AF investigational device
exemption (IDE) clinical trial which will evaluate the safety and
effectiveness of the POLARx™ Cryoablation System for the
treatment of paroxysmal atrial fibrillation (AF), an intermittent
form of AF which causes an irregular and often abnormally fast
heart rate.
- Announced at HRS 2020 Science final results from the UNTOUCHED
study of the EMBLEM™ Subcutaneous Implantable Defibrillator
(S-ICD) System, the only FDA-approved implantable defibrillator
without wires touching the heart, demonstrating high efficacy and
safety of the device and a lower rate of inappropriate shock than
many similar devices. Also presented as a late-breaking clinical
trial at the virtual meeting were results from the
investigator-sponsored PRAETORIAN trial confirming that the S-ICD
can be the preferred therapy choice for the majority of
ICD-indicated patients without a need for pacing.
- Published a meta-analysis of 1,011 prostate cancer patients in
The Journal of the American Medicine Association (JAMA) Network
Open which found that placing SpaceOAR Hydrogel® before
radiation is an effective preventative strategy to reduce
treatment-induced rectal complications. Each year, more than 1.1
million men are diagnosed with prostate cancer worldwide and
approximately 400,000 men will undergo prostate radiotherapy.
Recently, SpaceOAR surpassed 100,000 patients treated
worldwide.
- Announced The Lancet Neurology publication of the
INTREPID study—a double-blind, randomized study evaluating the
Vercise™ Deep Brain Stimulation (DBS) system for Parkinson's
disease. One-year results demonstrated a significant 51%
improvement in motor symptoms (UDPRS III scores) compared to
pre-surgery screening and six additional hours of ON time – or
daily symptom control – over medication.
- Launched a multi-year program to combat racism, inequity and
injustice, including $3.5 million in
philanthropic commitments, focused on five pillars: community,
economic empowerment, education, healthcare disparities and
government/legislative change.
- Increased financial flexibility by completing a public offering
of $1.7 billion aggregate principal
amount of Senior Notes, as well as completing an approximately
$2.0 billion public offering of
common stock and mandatory convertible preferred stock, and using a
portion of the proceeds of both offerings to repay borrowings under
our revolving credit facility and a significant portion of our
pre-payable bank debt.
1. Operational
revenue growth excludes the impact of foreign currency
fluctuations.
|
2. Organic
revenue growth excludes the impact of foreign currency fluctuations
and sales from the recent acquisitions of Vertiflex, Inc. and BTG
plc (BTG), each with no prior year comparable sales. Organic
revenue growth also excludes the impact of the divestiture of our
global embolic microspheres portfolio, a transaction entered into
in connection with obtaining the antitrust clearances required to
complete the BTG transaction, as well as the Q2 divestiture of our
intrauterine health franchise.
|
3. We define
Emerging Markets as the 20 countries that we believe have strong
growth potential based on their economic conditions, healthcare
sectors and our global capabilities.
|
4. We have three
historical reportable segments comprised of Medical Surgical
(MedSurg), Rhythm and Neuro, and Cardiovascular, which represent an
aggregation of our operating segments that generate revenues from
the sale of medical devices (Medical Devices). As part of our
acquisition of BTG on August 19, 2019, we acquired an
Interventional Medicine business, which is now included in our
Peripheral Interventions operating segment's revenues from the date
of acquisition.
|
5. As part of our
acquisition of BTG on August 19, 2019, we acquired a specialty
pharmaceuticals business (Specialty Pharmaceuticals). Subsequent to
acquisition, Specialty Pharmaceuticals is now a stand-alone
operating segment presented alongside our Medical Device reportable
segments. Specialty Pharmaceuticals net sales are substantially
U.S. based. Our chief operating decision maker (CODM) reviews
financial information of our globally managed Specialty
Pharmaceuticals operating segment at the worldwide level without
further disaggregation into regional results. As such, Specialty
Pharmaceuticals net sales are presented globally, and our Medical
Devices reportable segments regional net sales results do not
include Specialty Pharmaceuticals.
|
Net sales for the second quarter by business and
region:
|
|
|
|
|
Change
|
|
|
Three Months
Ended
June 30,
|
|
Reported
Basis
|
|
Less: Impact
of Foreign
Currency
Fluctuations
|
|
Operational
Basis
|
|
Less:
Impact of
Recent
Acquisitions /
Divestitures
|
|
Organic
Basis
|
(in
millions)
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Endoscopy
|
$
|
348
|
$
|
470
|
|
(26.0)%
|
|
(0.5)%
|
|
(25.5)%
|
|
—%
|
|
(25.5)%
|
|
Urology
and Pelvic Health
|
228
|
348
|
|
(34.5)%
|
|
(0.4)%
|
|
(34.1)%
|
|
(1.7)%
|
|
(32.4)%
|
|
MedSurg
|
576
|
818
|
|
(29.6)%
|
|
(0.5)%
|
|
(29.1)%
|
|
(0.7)%
|
|
(28.4)%
|
|
Cardiac
Rhythm Management
|
351
|
498
|
|
(29.4)%
|
|
(0.6)%
|
|
(28.8)%
|
|
—%
|
|
(28.8)%
|
|
Electrophysiology
|
51
|
84
|
|
(39.2)%
|
|
(0.3)%
|
|
(38.9)%
|
|
—%
|
|
(38.9)%
|
|
Neuromodulation
|
122
|
204
|
|
(40.0)%
|
|
(0.3)%
|
|
(39.7)%
|
|
2.9%
|
|
(42.6)%
|
|
Rhythm and
Neuro
|
525
|
786
|
|
(33.2)%
|
|
(0.5)%
|
|
(32.7)%
|
|
0.7%
|
|
(33.4)%
|
|
Interventional Cardiology
|
495
|
706
|
|
(29.9)%
|
|
(1.1)%
|
|
(28.8)%
|
|
—%
|
|
(28.8)%
|
|
Peripheral Interventions
|
340
|
320
|
|
6.0%
|
|
(1.0)%
|
|
7.0%
|
|
24.4%
|
|
(17.4)%
|
|
Cardiovascular
|
834
|
1,026
|
|
(18.7)%
|
|
(1.1)%
|
|
(17.6)%
|
|
7.7%
|
|
(25.3)%
|
|
Medical
Devices4
|
1,935
|
2,631
|
|
(26.5)%
|
|
(0.8)%
|
|
(25.7)%
|
|
3.0%
|
|
(28.7)%
|
|
Specialty
Pharmaceuticals5
|
68
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
Net
Sales
|
$
|
2,003
|
$
|
2,631
|
|
(23.9)%
|
|
(0.8)%
|
|
(23.1)%
|
|
5.6%
|
|
(28.7)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
Three Months
Ended
June 30,
|
|
Reported
Basis
|
|
Less: Impact
of Foreign
Currency
Fluctuations
|
|
Operational
Basis
|
(in
millions)
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
$
|
1,058
|
$
|
1,478
|
|
(28.4)%
|
|
—%
|
|
(28.4)%
|
|
EMEA
|
416
|
571
|
|
(27.2)%
|
|
(1.6)%
|
|
(25.6)%
|
|
APAC
|
410
|
481
|
|
(14.8)%
|
|
(0.8)%
|
|
(14.0)%
|
|
Latin America and
Canada
|
51
|
101
|
|
(49.4)%
|
|
(6.3)%
|
|
(43.1)%
|
|
Medical
Devices4
|
1,935
|
2,631
|
|
(26.5)%
|
|
(0.8)%
|
|
(25.7)%
|
|
Specialty
Pharmaceuticals5
|
68
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
Net
Sales
|
$
|
2,003
|
$
|
2,631
|
|
(23.9)%
|
|
(0.8)%
|
|
(23.1)%
|
|
|
|
|
|
|
|
|
|
|
|
Emerging
Markets3
|
$
|
255
|
|
$
|
318
|
|
(19.7)%
|
|
(5.1)%
|
|
(14.6)%
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not
add due to rounding. Growth rates are based on actual, non-rounded
amounts and may not recalculate precisely.
|
|
|
|
Sales growth rates
that exclude the impact of foreign currency fluctuations and/or the
impact of recent aforementioned acquisitions / divestitures are not
prepared in accordance with U.S. GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conference Call Information
Boston Scientific management will be discussing these results
with analysts on a conference call today at 8:00 a.m. EDT. The company will webcast the call
to interested parties through its website:
www.bostonscientific.com. Please see the website for details on how
to access the webcast. The webcast will be available for
approximately one year on the Boston Scientific website.
About Boston Scientific
Boston Scientific transforms
lives through innovative medical solutions that improve the health
of patients around the world. As a global medical technology
leader for 40 years, we advance science for life by providing a
broad range of high performance solutions that address unmet
patient needs and reduce the cost of healthcare. For more
information, visit www.bostonscientific.com and connect on
Twitter and Facebook.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains 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. Forward-looking statements may be identified by words
like "anticipate," "expect," "project," "believe," "plan,"
"estimate," "intend" and similar words. These forward-looking
statements are based on our beliefs, assumptions and estimates
using information available to us at the time and are not intended
to be guarantees of future events or performance. These
forward-looking statements include, among other things, statements
regarding our business plans and product performance, and the
impact of the COVID-19 outbreak on the company's results of
operations. If our underlying assumptions turn out to be
incorrect, or if certain risks or uncertainties materialize, actual
results could vary materially from the expectations and projections
expressed or implied by our forward-looking statements. These
factors, in some cases, have affected and in the future (together
with other factors) could affect our ability to implement our
business strategy and may cause actual results to differ materially
from those contemplated by the statements expressed in this press
release. As a result, readers are cautioned not to place undue
reliance on any of our forward-looking statements.
Factors that may cause such differences include, among other
things: future economic, political, competitive, reimbursement and
regulatory conditions; new product introductions; demographic
trends; intellectual property; litigation; financial market
conditions; and future business decisions made by us and our
competitors. All of these factors are difficult or impossible
to predict accurately and many of them are beyond our
control. For a further list and description of these and other
important risks and uncertainties that may affect our future
operations, see Part I, Item 1A - Risk Factors in our
most recent Annual Report on Form 10-K filed with the Securities
and Exchange Commission, which we may update in Part II, Item 1A
- Risk Factors in Quarterly Reports on Form 10-Q we have
filed or will file hereafter. We disclaim any intention or
obligation to publicly update or revise any forward-looking
statements to reflect any change in our expectations or in events,
conditions, or circumstances on which those expectations may be
based, or that may affect the likelihood that actual results will
differ from those contained in the forward-looking
statements. This cautionary statement is applicable to all
forward-looking statements contained in this document.
Note: Amounts reported in millions within this press
release are computed based on the amounts in thousands. As a
result, the sum of the components reported in millions may not
equal the total amount reported in millions due to rounding.
Certain columns and rows within tables may not add due to the use
of rounded numbers. Percentages presented are calculated from the
underlying numbers in dollars.
Use of Non-GAAP Financial Information
A reconciliation of the company's non-GAAP financial measures to
the corresponding GAAP measures, and an explanation of the
company's use of these non-GAAP financial measures, is
included in the exhibits attached to this press release.
CONTACT:
|
|
|
|
|
Media:
|
Kate
Haranis
|
|
Investors:
|
Susie Lisa,
CFA
|
|
508-683-6585
(office)
|
|
|
508-683-5565
(office)
|
|
Media
Relations
|
|
|
Investor
Relations
|
|
Boston Scientific
Corporation
|
|
|
Boston Scientific
Corporation
|
|
kate.haranis@bsci.com
|
|
|
BSXInvestorRelations@bsci.com
|
BOSTON SCIENTIFIC
CORPORATION
CONDENSED
CONSOLIDATED GAAP RESULTS OF OPERATIONS
(Unaudited)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
in millions,
except per share data
|
2020
|
2019
|
|
2020
|
2019
|
|
|
|
|
|
|
Net sales
|
$
|
2,003
|
|
$
|
2,631
|
|
|
$
|
4,546
|
|
$
|
5,124
|
|
Cost of products
sold
|
791
|
|
758
|
|
|
1,596
|
|
1,488
|
|
Gross
profit
|
1,212
|
|
1,873
|
|
|
2,950
|
|
3,636
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Selling, general and
administrative expenses
|
798
|
|
968
|
|
|
1,776
|
|
1,837
|
|
Research and
development expenses
|
242
|
|
280
|
|
|
542
|
|
559
|
|
Royalty
expense
|
8
|
|
17
|
|
|
20
|
|
32
|
|
Amortization
expense
|
197
|
|
161
|
|
|
398
|
|
321
|
|
Intangible asset
impairment charges
|
34
|
|
37
|
|
|
233
|
|
105
|
|
Contingent
consideration expense (benefit)
|
—
|
|
10
|
|
|
(108)
|
|
(18)
|
|
Restructuring charges
(credits)
|
3
|
|
1
|
|
|
13
|
|
7
|
|
Litigation-related net
charges (credits)
|
—
|
|
15
|
|
|
—
|
|
(133)
|
|
|
1,283
|
|
1,489
|
|
|
2,875
|
|
2,711
|
|
Operating income
(loss)
|
(71)
|
|
384
|
|
|
75
|
|
925
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
expense
|
(91)
|
|
(89)
|
|
|
(179)
|
|
(198)
|
|
Other, net
|
(18)
|
|
(150)
|
|
|
(54)
|
|
(125)
|
|
Income
(loss) before income taxes
|
(181)
|
|
145
|
|
|
(159)
|
|
602
|
|
Income tax expense
(benefit)
|
(33)
|
|
(9)
|
|
|
(22)
|
|
24
|
|
Net income
(loss)
|
$
|
(147)
|
|
$
|
154
|
|
|
$
|
(137)
|
|
$
|
578
|
|
Preferred stock
dividends
|
(5)
|
|
—
|
|
|
(5)
|
|
—
|
|
Net income (loss)
available to common stockholders
|
$
|
(153)
|
|
$
|
154
|
|
|
$
|
(142)
|
|
$
|
578
|
|
|
|
|
|
|
|
Net income (loss)
per common share - basic
|
$
|
(0.11)
|
|
$
|
0.11
|
|
|
$
|
(0.10)
|
|
$
|
0.42
|
|
Net income (loss)
per common share - assuming dilution
|
$
|
(0.11)
|
|
$
|
0.11
|
|
|
$
|
(0.10)
|
|
$
|
0.41
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding
|
|
|
|
|
|
Basic
|
1,410.9
|
|
1,391.0
|
|
|
1,404.1
|
|
1,389.4
|
|
Assuming
dilution
|
1,410.9
|
|
1,408.6
|
|
|
1,404.1
|
|
1,408.5
|
|
BOSTON SCIENTIFIC
CORPORATION
NON-GAAP NET INCOME
AND NET INCOME PER SHARE RECONCILIATIONS
(Unaudited)
|
|
|
Three Months Ended
June 30, 2020
|
(in millions,
except per share data)
|
Gross
Profit
|
Operating
Expenses
|
Operating
Income
(Loss)
|
Other
Income
(Expense)
|
Income (Loss)
Before
Income Taxes
|
Net Income
(Loss)*
|
Impact per
Share (1)
|
Reported
|
$
|
1,212
|
|
$
|
1,283
|
|
$
|
(71)
|
|
$
|
(110)
|
|
$
|
(181)
|
|
$
|
(153)
|
|
$
|
(0.11)
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
Amortization
expense
|
—
|
|
(197)
|
|
197
|
|
—
|
|
197
|
|
177
|
|
0.12
|
|
Intangible asset
impairment charges
|
—
|
|
(34)
|
|
34
|
|
—
|
|
34
|
|
27
|
|
0.02
|
|
Acquisition /
divestitures-related net charges (credits)
|
30
|
|
(31)
|
|
61
|
|
(1)
|
|
60
|
|
50
|
|
0.04
|
|
Restructuring and
restructuring-related net charges (credits)
|
16
|
|
(7)
|
|
23
|
|
—
|
|
23
|
|
20
|
|
0.01
|
|
EU MDR implementation
costs
|
5
|
|
(2)
|
|
7
|
|
—
|
|
7
|
|
6
|
|
0.00
|
|
Deferred tax expenses
(benefits)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(18)
|
|
(0.01)
|
|
Discrete tax
items
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11
|
|
0.01
|
|
Adjusted
|
$
|
1,263
|
|
$
|
1,012
|
|
$
|
252
|
|
$
|
(111)
|
|
$
|
141
|
|
$
|
120
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
(1) Assumes dilution
of 12.6 million shares for all or a portion of the non-GAAP
adjustments
|
* Net income (loss)
available to common stockholders
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2019
|
(in millions,
except per share data)
|
Gross
Profit
|
Operating
Expenses
|
Operating
Income
(Loss)
|
Other
Income
(Expense)
|
Income (Loss)
Before
Income Taxes
|
Net Income
(Loss)
|
Impact per
Share
|
Reported
|
$
|
1,873
|
|
$
|
1,489
|
|
$
|
384
|
|
$
|
(239)
|
|
$
|
145
|
|
$
|
154
|
|
$
|
0.11
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Amortization
expense
|
—
|
|
(161)
|
|
161
|
|
1
|
|
162
|
|
144
|
|
0.10
|
|
Intangible asset
impairment charges
|
—
|
|
(37)
|
|
37
|
|
—
|
|
37
|
|
35
|
|
0.02
|
|
Acquisition-related
net charges (credits)
|
19
|
|
(45)
|
|
64
|
|
161
|
|
225
|
|
177
|
|
0.13
|
|
Restructuring and
restructuring-related net charges (credits)
|
6
|
|
(5)
|
|
11
|
|
—
|
|
11
|
|
10
|
|
0.01
|
|
Litigation-related net
charges (credits)
|
—
|
|
(15)
|
|
15
|
|
—
|
|
15
|
|
12
|
|
0.01
|
|
Investment impairment
charges
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
|
1
|
|
0.00
|
|
Discrete tax
items
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
18
|
|
0.01
|
|
Adjusted
|
$
|
1,897
|
|
$
|
1,226
|
|
$
|
672
|
|
$
|
(76)
|
|
$
|
596
|
|
$
|
550
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
An explanation of
the company's use of these non-GAAP financial measures is provided
at the end of this document.
|
BOSTON SCIENTIFIC
CORPORATION
NON-GAAP NET INCOME
AND NET INCOME PER SHARE RECONCILIATIONS
(Unaudited)
|
|
|
Six Months Ended
June 30, 2020
|
in millions,
except per share data
|
Gross
Profit
|
Operating
Expenses
|
Operating
Income
(Loss)
|
Other
Income
(Expense)
|
Income (Loss)
Before
Income Taxes
|
Net Income
(Loss)*
|
Impact per
Share (1)
|
Reported
|
$
|
2,950
|
|
$
|
2,875
|
|
$
|
75
|
|
$
|
(234)
|
|
$
|
(159)
|
|
$
|
(142)
|
|
$
|
(0.10)
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Amortization
expense
|
—
|
|
(398)
|
|
398
|
|
—
|
|
398
|
|
356
|
|
0.25
|
|
Intangible asset
impairment charges
|
—
|
|
(233)
|
|
233
|
|
—
|
|
233
|
|
195
|
|
0.14
|
|
Acquisition /
divestitures-related net charges (credits)
|
67
|
|
38
|
|
29
|
|
8
|
|
37
|
|
13
|
|
0.01
|
|
Restructuring and
restructuring-related net charges (credits)
|
32
|
|
(22)
|
|
53
|
|
—
|
|
53
|
|
45
|
|
0.03
|
|
EU MDR implementation
costs
|
9
|
|
(3)
|
|
12
|
|
—
|
|
12
|
|
11
|
|
0.01
|
|
Deferred tax expenses
(benefits)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8
|
|
0.01
|
|
Discrete tax
items
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
24
|
|
0.02
|
|
Adjusted
|
$
|
3,057
|
|
$
|
2,257
|
|
$
|
801
|
|
$
|
(226)
|
|
$
|
575
|
|
$
|
511
|
|
$
|
0.36
|
|
|
|
|
|
|
|
|
|
(1) Assumes dilution
of 14.4 million shares for all or a portion of the non-GAAP
adjustments
|
* Net income (loss)
available to common stockholders
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2019
|
in millions,
except per share data
|
Gross
Profit
|
Operating
Expenses
|
Operating
Income
(Loss)
|
Other
Income
(Expense)
|
Income (Loss)
Before
Income Taxes
|
Net Income
(Loss)
|
Impact per
Share
|
Reported
|
$
|
3,636
|
|
$
|
2,711
|
|
$
|
925
|
|
$
|
(323)
|
|
$
|
602
|
|
$
|
578
|
|
$
|
0.41
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Amortization
expense
|
—
|
|
(321)
|
|
321
|
|
2
|
|
323
|
|
287
|
|
0.20
|
|
Intangible asset
impairment charges
|
—
|
|
(105)
|
|
105
|
|
—
|
|
105
|
|
97
|
|
0.07
|
|
Acquisition /
divestitures-related net charges (credits)
|
31
|
|
(38)
|
|
69
|
|
132
|
|
201
|
|
155
|
|
0.11
|
|
Restructuring and
restructuring-related net charges (credits)
|
10
|
|
(14)
|
|
23
|
|
—
|
|
23
|
|
19
|
|
0.01
|
|
Litigation-related net
charges (credits)
|
—
|
|
133
|
|
(133)
|
|
—
|
|
(133)
|
|
(116)
|
|
(0.08)
|
|
Investment impairment
charges
|
—
|
|
—
|
|
—
|
|
2
|
|
2
|
|
2
|
|
0.00
|
|
Discrete tax
items
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
18
|
|
0.01
|
|
Adjusted
|
$
|
3,677
|
|
$
|
2,367
|
|
$
|
1,310
|
|
$
|
(187)
|
|
$
|
1,123
|
|
$
|
1,040
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
An explanation of
the company's use of these non-GAAP financial measures is provided
at the end of this document.
|
Use of Non-GAAP Financial Measures
To supplement our unaudited condensed consolidated financial
statements presented on a GAAP basis, we disclose certain non-GAAP
financial measures, including adjusted net income (loss) and
adjusted net income (loss) per share (EPS) that exclude certain
amounts, operational net sales, which exclude the impact of foreign
currency fluctuations and organic net sales, which exclude the
impact of foreign currency fluctuations and the impact of recent
aforementioned acquisitions and divestitures. These non-GAAP
financial measures are not in accordance with generally accepted
accounting principles in the United
States and should not be considered in isolation from or as
a replacement for the most directly comparable GAAP financial
measures. Further, other companies may calculate these non-GAAP
financial measures differently than we do, which may limit the
usefulness of those measures for comparative purposes.
To calculate adjusted net income (loss) and adjusted net income
(loss) per share we exclude certain charges (credits) from GAAP net
income available to common stockholders. Amounts are presented
after-tax at the company's effective tax rate, unless the amount is
a significant unusual or infrequently occurring item in accordance
with FASB Accounting Standards Codification section 740-270-30,
"General Methodology and Use of Estimated Annual Effective Tax
Rate." Please refer to Part II, Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations in our
most recent Annual Report filed on Form 10-K filed with the
Securities and Exchange Commission or any Quarterly Report on Form
10-Q that we file thereafter for an explanation of each of these
adjustments and the reasons for excluding each item.
The GAAP financial measures most directly comparable to adjusted
net income (loss) and adjusted net income (loss) per share are GAAP
net income (loss) and GAAP net income (loss) per share available to
common stockholders.
To calculate operational net sales growth rates, which exclude
the impact of foreign currency fluctuations, we convert actual net
sales from local currency to U.S. dollars using constant foreign
currency exchange rates in the current and prior period. To
calculate organic net sales growth rates, we remove the impact of
recent aforementioned acquisitions with no prior period related net
sales from operational net sales. In addition, to calculate organic
net sales growth rates, we remove from prior year, sales from
product lines that we divested. The GAAP financial measure most
directly comparable to operational net sales and organic net sales
is net sales on a GAAP basis.
Reconciliations of each of these non-GAAP financial measures to
the corresponding GAAP financial measure are included in the
accompanying schedules.
Management uses these supplemental non-GAAP financial measures
to evaluate performance period over period, to analyze the
underlying trends in our business, to assess our performance
relative to our competitors and to establish operational goals and
forecasts that are used in allocating resources. In addition,
management uses these non-GAAP financial measures to further its
understanding of the performance of our operating segments. The
adjustments excluded from our non-GAAP financial measures are
consistent with those excluded from our operating segments'
measures of net sales and profit or loss. These adjustments are
excluded from the segment measures reported to our chief operating
decision maker that are used to make operating decisions and assess
performance.
We believe that presenting adjusted net income (loss) and
adjusted net income (loss) per share, operational net sales and
organic net sales, in addition to the corresponding GAAP financial
measures, provides investors greater transparency to the
information used by management for its operational decision-making
and allows investors to see our results "through the eyes" of
management. We further believe that providing this information
assists our investors in understanding our operating performance
and the methodology used by management to evaluate and measure such
performance.
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SOURCE Boston Scientific Corporation