MARLBOROUGH, Mass., April 27,
2022 /PRNewswire/ -- Boston Scientific Corporation
(NYSE: BSX) generated net sales of $3.026
billion during the first quarter of 2022, growing 10.0
percent on a reported basis, 12.6 percent on an
operational1 basis and 9.7 percent on an
organic2 basis, all compared to the prior year period.
The company reported GAAP net income available to common
stockholders of $97 million or
$0.07 per share (EPS), compared to
$327 million or $0.23 per share a year ago, and achieved adjusted
EPS of $0.39 for the period, compared
to $0.37 a year ago.
"Our growth this quarter was fueled by strong execution from our
global team, our innovative portfolio and improved procedure
volume," said Mike Mahoney, chairman
and chief executive officer, Boston Scientific. "We are pleased
with our first quarter performance and outlook for the full year,
despite the impact of macroeconomic headwinds, and we look forward
to bringing meaningful innovation to customers and the patients we
serve together."
First quarter financial results and recent
developments:
- Reported net sales of $3.026
billion, representing an increase of 10.0 percent on a
reported basis, compared to the company's guidance range of 5 to 8
percent; 12.6 percent on an operational basis; and 9.7 percent on
an organic basis, compared to the company's guidance range of 5 to
8 percent, all compared to the prior year period.
- Reported GAAP net income available to common stockholders of
$0.07 per share, compared to the
company's guidance range of $0.16 to
$0.20 per share, and achieved
adjusted EPS of $0.39 per share,
compared to the guidance range of $0.38 to $0.40 per
share.
- Achieved net sales growth in each reportable
segment4, compared to the prior year period:
-
- MedSurg: 9.1 percent reported, 11.1 percent operational
and 8.0 percent organic
- Cardiovascular: 11.4 percent reported, 14.5 percent operational
and 10.8 percent organic
- Achieved the following regional5 net sales
growth, compared to the prior year period:
-
- U.S.: 12.8 percent reported and operational
- EMEA (Europe,
Middle East and Africa): 3.3 percent reported and 12.0 percent
operational
- APAC (Asia-Pacific): 9.3
percent reported and 13.6 percent operational
- Emerging Markets3: 22.8 percent reported and
28.7 percent operational
- Announced real-world data from the SURPASS 45-day analysis of
more than 16,000 patients with the WATCHMAN FLX™ Left Atrial
Appendage Closure Device from the National Cardiovascular
Data (NCDR) Registry Left Atrial Appendage Occlusion
(LAAO) Registry, as well as final one-year results
from the FLXibility post-approval study with the
device in Europe, both
demonstrating low rates of adverse events and high rates of
LAA closure in everyday clinical practice. Also received
approval for the WATCHMAN FLX device in China by the National Medical Products
Administration (NMPA) and will begin a limited market
release in the coming months.
- Announced at the European Heart Rhythm Association (EHRA)
annual meeting acute, real-world outcomes from the POLAR ICE study,
which demonstrated that the POLARx™ Cryoablation
System met safety and efficacy endpoints when used to
perform pulmonary vein isolation (PVI) for the
ablation treatment of atrial fibrillation. A low rate of
procedure-related complications, a high rate of acute
PVI, and short procedure and left-atrial dwell times was also
observed.
- Received U.S. Food and Drug Administration (FDA) clearance for
the EMBOLD™ Fibered Coil, a fully retractable coil indicated
for arterial and venous embolization in the peripheral vasculature.
The EMBOLD Fibered Coil enhances the existing Boston Scientific
embolization portfolio.
- Received FDA investigational device exemption (IDE) to commence
the FRONTIER study, a clinical trial assessing TheraSphere™
Y-90 Glass Microspheres as a
treatment option for patients with recurrent glioblastoma, an
aggressive type of cancer that can occur in the brain.
- Received FDA approval for next-generation Image Guided
Programming Software for Deep Brain Stimulation Therapy.
Vercise™ Neural Navigator with STIMVIEW™ XT enables
clinicians to both visualize real-time lead placement and
stimulation modeling of the brain anatomy in patients with
Parkinson's disease or essential tremor.
- Received National Medical Products Administration (NMPA)
approval in China for Rezūm™
Water Vapor Therapy. The Rezūm System is a minimally invasive
treatment for benign prostatic hyperplasia (BPH), which affects up
to 62 percent of men globally who have a prostate and are over 50
years of age.
- Received Health Canada approval for the first-of-its kind
LithoVue™ Elite Single-Use Digital Flexible Ureteroscope
with pressure monitoring and StoneSmart™ Connect Console.
The LithoVue Elite System is designed to allow physicians to
monitor intrarenal pressure during ureteroscopy procedures to make
pressure-related decisions in real time.
- Completed in mid-February the acquisition of Baylis Medical
Company Inc., a company that offers advanced transseptal access
solutions as well as guidewires, sheaths and dilators used to
support catheter-based left-heart procedures.
- Completed a public offering of €3 billion ($3.3 billion) aggregate principal amount of
EUR-denominated Senior Notes, and tender offer and early redemption
of $3.3 billion aggregate principal
amount of certain outstanding USD-denominated Senior Notes.
1. Operational net
sales growth excludes the impact of foreign currency
fluctuations.
|
2. Organic net sales
growth excludes the impact of foreign currency fluctuations and net
sales attributable to acquisitions and divestitures for which there
are less than a full period of comparable net sales.
|
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. In the first
quarter of 2022, we reorganized our operational structure and have
aggregated our core businesses, each of which generate revenues
from the sale of medical devices (Medical Devices), into two
reportable segments comprised of MedSurg and Cardiovascular. Within
the Cardiovascular segment, the newly formed Cardiology division
represents the combined former Rhythm Management and Interventional
Cardiology businesses. We have revised prior period amounts
to conform to the current year presentation.
|
5. On March 1, 2021,
we completed the sale of the Specialty Pharmaceuticals business.
Our consolidated net sales include Specialty Pharmaceuticals up to
the date of the closing of the transaction. Specialty
Pharmaceuticals net sales were substantially U.S. based and
presented as a stand-alone operating segment alongside our Medical
Device reportable segments.
|
|
Net sales for the
first quarter by business and region:
|
|
|
|
|
|
|
|
Increase/(Decrease)
|
|
|
Three Months Ended
March 31,
|
|
Reported
Basis
|
|
Less: Impact
of Foreign
Currency
Fluctuations
|
|
Operational
Basis
|
|
Less:
Impact of
Recent
Acquisitions
/ Divestitures
|
|
Organic
Basis
|
(in millions)
|
2022
|
2021
|
|
|
|
|
|
|
Endoscopy
|
$
531
|
$
499
|
|
6.4 %
|
|
(2.4) %
|
|
8.8 %
|
|
— %
|
|
8.8 %
|
|
Urology
and Pelvic Health
|
413
|
361
|
|
14.4 %
|
|
(1.6) %
|
|
16.1 %
|
|
9.1 %
|
|
6.9 %
|
|
Neuromodulation
|
209
|
198
|
|
5.8 %
|
|
(1.8) %
|
|
7.6 %
|
|
— %
|
|
7.6 %
|
|
MedSurg4
|
1,153
|
1,058
|
|
9.1
%
|
|
(2.0)
%
|
|
11.1
%
|
|
3.1
%
|
|
8.0
%
|
|
Cardiology
|
1,407
|
1,248
|
|
12.7 %
|
|
(3.3) %
|
|
16.0 %
|
|
5.0 %
|
|
11.1
%
|
|
Peripheral
Interventions
|
465
|
433
|
|
7.5 %
|
|
(2.6) %
|
|
10.1 %
|
|
— %
|
|
10.1 %
|
|
Cardiovascular4
|
1,873
|
1,681
|
|
11.4
%
|
|
(3.1)
%
|
|
14.5
%
|
|
3.7
%
|
|
10.8
%
|
|
Medical Devices4
|
3,026
|
2,739
|
|
10.5
%
|
|
(2.7)
%
|
|
13.2
%
|
|
3.5
%
|
|
9.7
%
|
|
Specialty
Pharmaceuticals5
|
—
|
13
|
|
(100.0)
%
|
|
— %
|
|
(100.0)
%
|
|
— %
|
|
(100.0)
%
|
Net Sales
|
$
3,026
|
$
2,752
|
|
10.0
%
|
|
(2.7)
%
|
|
12.6
%
|
|
2.9
%
|
|
9.7
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease)
|
|
|
Three Months
Ended March 31,
|
|
Reported
Basis
|
|
Less: Impact
of Foreign
Currency
Fluctuations
|
|
Operational
Basis
|
(in millions)
|
2022
|
2021
|
|
|
|
|
U.S.
|
$ 1,778
|
$ 1,577
|
|
12.8 %
|
|
— %
|
|
12.8 %
|
|
EMEA
|
624
|
604
|
|
3.3 %
|
|
(8.7) %
|
|
12.0 %
|
|
APAC
|
517
|
473
|
|
9.3 %
|
|
(4.4) %
|
|
13.6 %
|
|
Latin America and Canada
|
107
|
85
|
|
25.7 %
|
|
(0.6) %
|
|
26.3 %
|
|
Medical Devices4
|
3,026
|
2,739
|
|
10.5
%
|
|
(2.7)
%
|
|
13.2
%
|
|
Specialty
Pharmaceuticals5
|
—
|
13
|
|
(100.0)
%
|
|
— %
|
|
(100.0)
%
|
|
Net Sales
|
$ 3,026
|
$ 2,752
|
|
10.0
%
|
|
(2.7)
%
|
|
12.6
%
|
|
|
|
|
|
|
|
|
|
|
|
Emerging Markets3
|
$
390
|
$
317
|
|
22.8
%
|
|
(5.8)
%
|
|
28.7
%
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add due to rounding. Growth rates are
based on actual, non-rounded amounts and may not recalculate
precisely.
|
|
|
|
Growth rates that exclude the impact of foreign
currency fluctuations and/or the impact of acquisitions /
divestitures are not prepared in accordance with U.S.
GAAP.
|
Guidance for Full Year and Second Quarter 2022
The company now estimates net sales growth for the full year
2022, versus the prior year period, to be in a range of
approximately 7 to 9 percent on a reported basis, and approximately
6.5 to 8.5 percent on an organic basis. Full year organic net sales
guidance excludes the impact of foreign currency fluctuations and
net sales attributable to acquisitions and divestitures for which
there are less than a full period of comparable net sales. The
company now estimates EPS on a GAAP basis in a range of
$0.78 to $0.88 and estimates adjusted EPS, excluding
certain charges (credits), of $1.74
to $1.79.
The company estimates net sales growth for the second quarter of
2022, versus the prior year period, to be in a range of
approximately 3 to 6 percent on a reported basis and organic basis.
Second quarter organic net sales guidance excludes the impact of
foreign currency fluctuations and net sales attributable to
acquisitions and divestitures for which there are less than a full
period of comparable net sales. The company estimates EPS on a GAAP
basis in a range of $0.19 to
$0.23 and adjusted EPS, excluding
certain charges (credits), of $0.41
to $0.43.
Conference Call Information
Boston Scientific management will be discussing these results
with analysts on a conference call today at 8:00 a.m. ET. 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 more than 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," "may," "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 expected net sales;
reported, operational and organic revenue growth rates; reported
and adjusted EPS for the second quarter and full year
2022; our financial performance; our business plans and product
performance; and the impact of the COVID-19 pandemic 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.
Risks and uncertainties that may cause such differences include,
among other things: the impact of the ongoing COVID-19 pandemic on
our operations and financial results; future U.S. and global
economic, political, competitive, reimbursement and regulatory
conditions; manufacturing, distribution and supply chain
disruptions and cost increases; disruptions caused by cybersecurity
events; disruptions caused by extreme weather or other climate
change-related events; labor shortages and increases in labor
costs; new product introductions; expected procedural volumes; the
closing and integration of acquisitions; demographic trends;
intellectual property rights; litigation; financial market
conditions; the execution and effect of our business strategy,
including our cost-savings and growth initiatives; and future
business decisions made by us and our competitors. New risks and
uncertainties may arise from time to time and are difficult to
predict, including those that have emerged or have increased in
significance or likelihood as a result of the COVID-19
pandemic. 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 press
release.
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:
|
Lauren
Tengler
|
|
508-683-6585
(office)
|
|
|
508-683-4479
(office)
|
|
Media
Relations
|
|
|
Investor
Relations
|
|
Boston Scientific
Corporation
|
|
|
Boston Scientific
Corporation
|
|
kate.haranis@bsci.com
|
|
|
BSXInvestorRelations@bsci.com
|
BOSTON SCIENTIFIC
CORPORATION
|
CONSOLIDATED STATEMENTS
OF OPERATIONS
|
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
in millions, except per share
data
|
2022
|
2021
|
|
|
|
Net sales
|
$
3,026
|
$
2,752
|
Cost of products
sold
|
955
|
894
|
Gross profit
|
2,071
|
1,858
|
|
|
|
Operating
expenses:
|
|
|
Selling, general and administrative expenses
|
1,060
|
1,019
|
Research and development expenses
|
319
|
276
|
Royalty expense
|
12
|
12
|
Amortization expense
|
198
|
185
|
Contingent consideration net expense (benefit)
|
12
|
(6)
|
Restructuring net charges (credits)
|
4
|
5
|
Litigation-related net charges (credits)
|
—
|
4
|
Gain on disposal of businesses and assets
|
—
|
(6)
|
|
1,605
|
1,488
|
Operating income
(loss)
|
466
|
370
|
|
|
|
Other income
(expense):
|
|
|
Interest expense
|
(279)
|
(82)
|
Other, net
|
(31)
|
37
|
Income
(loss) before income taxes
|
156
|
325
|
Income tax expense (benefit)
|
45
|
(16)
|
Net income
(loss)
|
$
110
|
$
341
|
Preferred stock dividends
|
(14)
|
(14)
|
Net income (loss) available to common
stockholders
|
$
97
|
$
327
|
|
|
|
Net income (loss) per common share -
basic
|
$
0.07
|
$
0.23
|
Net income (loss) per common share - assuming
dilution
|
$
0.07
|
$
0.23
|
|
|
|
Weighted-average shares
outstanding
|
|
|
Basic
|
1,427.8
|
1,418.7
|
Assuming
dilution
|
1,438.4
|
1,430.8
|
BOSTON SCIENTIFIC
CORPORATION
|
NON-GAAP NET
INCOME AND NET INCOME PER SHARE RECONCILIATIONS
|
(Unaudited)
|
|
|
Three Months Ended
March 31, 2022
|
|
(in millions, except
per share data)
|
Gross
Profit
|
Operating
Expenses
|
Operating
Income
(Loss)
|
Other
Income
(Expense)
|
Income
(Loss)
Before
Income
Taxes
|
Net
Income
(Loss)
|
Preferred
Stock
Dividends
|
Net Income
(Loss)
Available to
Common
Stockholders
|
Impact
per
Share (1)
|
|
Reported
|
$ 2,071
|
$
1,605
|
$
466
|
$
(310)
|
$
156
|
$
110
|
$
(14)
|
$
97
|
$ 0.07
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
Amortization expense
|
—
|
(198)
|
198
|
—
|
198
|
170
|
—
|
170
|
0.12
|
|
Acquisition / divestiture-related net
charges (credits)
|
27
|
(45)
|
72
|
—
|
72
|
72
|
—
|
72
|
0.05
|
|
Restructuring and restructuring-related
net charges (credits)
|
18
|
(11)
|
29
|
—
|
29
|
25
|
—
|
25
|
0.02
|
|
Investment portfolio net losses (gains)
|
—
|
—
|
—
|
7
|
7
|
5
|
—
|
5
|
0.00
|
|
EU
MDR implementation costs
|
10
|
(6)
|
16
|
—
|
16
|
14
|
—
|
14
|
0.01
|
|
Debt extinguishment charges
|
—
|
—
|
—
|
194
|
194
|
149
|
—
|
149
|
0.10
|
|
Deferred tax expenses (benefits)
|
—
|
—
|
—
|
—
|
—
|
30
|
—
|
30
|
0.02
|
|
Discrete tax items
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
0.00
|
|
Adjusted
|
$ 2,127
|
$
1,346
|
$
781
|
$
(110)
|
$
671
|
$
575
|
$
(14)
|
$
562
|
$ 0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the
three months ended March 31, 2022, the effect of assuming the
conversion of Mandatory Convertible Preferred Stock (MCPS) into
shares of common stock was anti-dilutive, and therefore excluded
from the calculation of EPS. Accordingly, GAAP net income and
adjusted net income were reduced by cumulative Preferred stock
dividends, as presented in our unaudited consolidated statements of
operations, for purposes of calculating net income available to
common stockholders.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2021
|
|
(in millions, except
per share data)
|
Gross
Profit
|
Operating
Expenses
|
Operating
Income
(Loss)
|
Other
Income
(Expense)
|
Income
(Loss)
Before
Income
Taxes
|
Net
Income
(Loss)
|
Preferred
Stock
Dividends
|
Net Income
(Loss)
Available to
Common
Stockholders
|
Impact
per
Share (1)
|
|
Reported
|
$ 1,858
|
$
1,488
|
$
370
|
$
(45)
|
$
325
|
$
341
|
$
(14)
|
$
327
|
$ 0.23
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
Amortization expense
|
—
|
(185)
|
185
|
—
|
185
|
167
|
—
|
167
|
0.12
|
|
Acquisition / divestiture-related net
charges (credits)
|
14
|
(37)
|
50
|
(198)
|
(148)
|
(153)
|
—
|
(153)
|
(0.11)
|
|
Restructuring and restructuring-related
net charges (credits)
|
18
|
(31)
|
49
|
—
|
49
|
44
|
—
|
44
|
0.03
|
|
Litigation-related net charges (credits)
|
—
|
(4)
|
4
|
—
|
4
|
4
|
—
|
4
|
0.00
|
|
Investment portfolio net losses (gains)
|
—
|
—
|
—
|
146
|
146
|
112
|
—
|
112
|
0.08
|
|
EU
MDR implementation costs
|
7
|
(3)
|
11
|
—
|
11
|
10
|
—
|
10
|
0.01
|
|
Deferred tax expenses (benefits)
|
—
|
—
|
—
|
—
|
—
|
17
|
—
|
17
|
0.01
|
|
Discrete tax items
|
—
|
—
|
—
|
—
|
—
|
(3)
|
—
|
(3)
|
(0.00)
|
|
Adjusted
|
$ 1,897
|
$
1,228
|
$
669
|
$
(97)
|
$
572
|
$
538
|
$
(14)
|
$
524
|
$ 0.37
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the
three months ended March 31, 2021, the effect of assuming the
conversion of Mandatory Convertible Preferred Stock (MCPS) into
shares of common stock was anti-dilutive, and therefore excluded
from the calculation of EPS. Accordingly, GAAP net income and
adjusted net income were reduced by cumulative Preferred stock
dividends, as presented in our unaudited consolidated statements of
operations, for purposes of calculating net income available to
common stockholders.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
An explanation of
the company's use of these non-GAAP financial measures is provided
at the end of this document.
|
|
BOSTON SCIENTIFIC
CORPORATION
|
Q2
and FY 2022 GUIDANCE RECONCILIATIONS
|
(Unaudited)
|
|
Net
Sales
|
|
|
Q2 2022 Estimate
|
|
Full Year 2022 Estimate
|
|
(Low)
|
(High)
|
|
(Low)
|
(High)
|
Reported growth
|
3.0
%
|
6.0
%
|
|
7.0
%
|
9.0
%
|
Less: Impact of foreign currency fluctuations
|
(3.0) %
|
(3.0) %
|
|
(2.0) %
|
(2.0) %
|
Operational growth
|
6.0
%
|
9.0
%
|
|
9.0
%
|
11.0
%
|
Less: Impact of certain acquisitions /
divestitures
|
3.0 %
|
3.0 %
|
|
2.5 %
|
2.5 %
|
Organic growth
|
3.0
%
|
6.0
%
|
|
6.5
%
|
8.5
%
|
Earnings per
Share
|
|
|
Q2 2022 Estimate
|
|
Full Year 2022 Estimate
|
|
(Low)
|
(High)
|
|
(Low)
|
(High)
|
GAAP results
|
$
0.19
|
$
0.23
|
|
$
0.78
|
$
0.88
|
|
|
|
|
|
|
Amortization
expense
|
0.12
|
0.12
|
|
0.48
|
0.48
|
Acquisition /
divestiture-related net charges (credits)
|
0.04
|
0.03
|
|
0.14
|
0.12
|
Restructuring and
restructuring-related net charges (credits)
|
0.03
|
0.02
|
|
0.09
|
0.07
|
Debt extinguishment
charges
|
—
|
—
|
|
0.10
|
0.10
|
Other
adjustments
|
0.03
|
0.03
|
|
0.15
|
0.14
|
Adjusted results
|
$
0.41
|
$
0.43
|
|
$
1.74
|
$
1.79
|
Use of Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements
presented on a GAAP basis, we disclose certain non-GAAP financial
measures, including adjusted net income (loss), adjusted net income
(loss) available to common stockholders 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 as well as the impact of certain
acquisitions and divestitures with less than a full period of
comparable net sales. 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), adjusted net income
(loss) available to common stockholders and adjusted net income
(loss) per share we exclude certain charges (credits) from GAAP net
income (loss) and GAAP net income (loss) 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 Financial Accounting
Standards Board Accounting Standards Codification Topic 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), adjusted net income (loss) available to common
stockholders and adjusted net income (loss) per share are GAAP net
income (loss), GAAP net income (loss) available to common
stockholders and GAAP net income (loss) per common share - assuming
dilution, respectively.
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 periods. To
calculate organic net sales growth rates, we also remove the impact
of acquisitions and divestitures with less than a full period of
comparable net sales. 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), adjusted
net income (loss) available to common stockholders, adjusted net
income (loss) per share, operational net sales growth rates and
organic net sales growth rates, 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